 My name's Elena Cherney, I'm the global energy editor at the Wall Street Journal. Welcome to this strategic update on the future of energy and the major drivers of transformation. We're having this conversation at a moment of unprecedented upheaval and change in energy markets, both in the short term and in the much longer term. In the short term, we're witnessing a rebalancing between supply and demand after a two-year price collapse that has been punishing for energy producers, oil exporting economies and has sapped investment in the sector around the world. The short, the recovery in prices is playing out against the much longer term and more fundamental shift in the way that the world produces, distributes and consumes energy. That shift is moving toward a lower carbon economy and away from the kind of fossil fuel dependence that has defined economies for, well probably since the industrial revolution. That movement seems to be difficult to deny, the momentum is there. The questions though are looming around how quickly this change will take place, what it will mean, what will be the sources of energy that replace the ones that we're currently using, what it will mean for consumers, policymakers and especially the energy industry, many of whom are many parts of which are represented here today. I'd like to start by introducing our panelists and then asking each of them to give a viewpoint on how these drivers of change affected them and where they see things going. We have here Dr. Fatih Biral, the International Energy Agency, Kenneth Hirsch, who is the co-founder and chairman of NGCO Management, Amin Nasser, the CEO of Saudi Aramco, Francesco Storace, the CEO of NL, and Chao Baoping, the chairman of China Gwodian Corp. Let me start with Dr. Biral. Help us to understand some of the shorter term, if there's both a short term upheaval and a longer term upheaval underway, help us to understand in 2016 what were some of the key moments that have brought us to this moment of rebalancing or tentative rebalancing in markets, but how does that also connect to the much longer term question of where demand is going. You and I, before we came in, we were talking about the question of peak demand, peak oil demand, help us to understand where we are now short term, but also what some of these bigger term questions, longer term questions are and how we may get there. Thank you and good morning to everybody. So you asked a very comprehensive question. First, perhaps three important in my view, data developments, what happened last year, and a bit of the oil demand peak, the famous question. For me, a key development was last year when you get the global electricity markets, when you look at all the new power plants installed last year, more than 50% of them was renewables alone and less than half coal plus oil plus gas plus nuclear put together. So which means nuclear, pardon renewables, was the main choice for the utilities for the governments. And for the first time we have seen installed capacity coming from renewables was higher than everybody else, which showed us that renewables are not anymore a romantic western song. It's a business, it is happening and people make money off that. This is number one. Number two, in terms of coal, coal means China. Half of the coal is used today in China, other half rest of the world. Two years in a row, last year it was again confirmed Chinese coal consumption is in a decline. This is the second important one. Third important one, finishing with oil. We have seen low oil prices and an agreement between OPEC and non-OPEC countries. Now these are three I thought important developments that in addition to many other things under LNG and so on, but just to pick up these three. When looking at the future, peak oil demand, you mentioned, there is a lot of discussion. I just came this morning from Abu Dhabi with his excellency here. Now everybody is talking about electric cars and therefore oil demand is, we are going to see soon a peak oil demand. I don't agree with that. I agree that we will see more and more and increasingly more electric cars, they will penetrate the markets, but cars are one of the drivers of oil demand growth. There are other drivers, which are trucks, planes, ships and petrochemical industry, which will continue to push the oil demand growth. And as such, while I agree that the oil demand growth may be slower in the future than in the past, oil demand will continue to grow at a slower pace. And just looking at the car manufacturing and from that, extrapolating for the global oil demand growth may not be the right way to do it, I would say. Mr. Nasser, if I can ask you to pick up on this, if Dr. Biral is right, there will be some time to go for fossil fuels. This is not imminent. Other people have voiced different views on peak demand. So you have quite a bit of time. There will be a lot of demand for Saudi Aramco's oil. But as I understand it, the company is taking steps to diversify and to prepare for a day when taking oil out of the ground may not be as good a business as it is right now. Tell us a little bit about what you're doing and where you see demand going, why you're taking the steps that you're taking. Thank you and good morning. And I agree with Dr. Fatih that there is a global transformation that is currently undergoing. And it is putting a lot of pressure on the oil and gas industry, the petroleum industry, mainly also because of climate change and government policies and technology advancement. The two key questions I think Fatih also alluded to is energy mix and timing. With regard to two areas that will be impacted, power generation and the light vehicle industry. With regard to power generation, which will be impacted, today, if you look at it, 23% is renewable. But in new renewable solar and wind, it's only 4%. So they still have a long way to go to be a dominant, create a dominant impact on the power generation over the long term. If you look at China, even though it is in the decline, but it's still 70% of the power generation in China is in coal, 80% in India, 45% in Germany and even in the US is almost one third in coal today. And the electric vehicles, which is something very important and it is it impact oil in particular, there is today 1.2 million vehicles worldwide in electric out of a fleet of about 1.2 billion. Looking at the IA forecast by 2040, there will be approximately 150 million electric vehicles, which is but the fleet will go from 1.2 billion to 2 billion. So basically 8% penetration in the light vehicle industry. And as Viti also mentioned, the oil is not all in light vehicle industry or some of it small part in power generation, but heavy trucks, aviation, shipping 30%. 15% is in petrochemicals and loops and in bitumen. So yes, renewable will gain a market share over the long term, but they will not be dominant until take decades for them to replace petroleum resources. So what we are doing in Saudi Aramco, we are building our capacity in the oil. We are the most reliable producer. We have a maximum sustained capacity of 12 million barrels per day. The kingdom has a capacity of 12.5 million barrels per day. We continue to build our capacity. We are expanding our gas portfolio, where we will be doubling our gas over the next decade. Power generation in the kingdom will be 70% on gas. So basically will be the highest worldwide in terms of power generation using gas, which will allow us to avail more crude to the market. Our forecast, there is healthy demand. We saw it in 2016, 1.4 million barrels per day. 2017, we're talking about 1.3 million barrels per day. You need to take into account even looking at IA prediction by 2040 for oil demanded. And the worst scenario, we're talking about 73. The best scenario, we're talking about 117 with a base case of 103. So there is a growth in the oil sector even by 2040, even if you look at 2060. So we need to be prepared for that. And we are building our capacity to be prepared for that. So I think hydrocarbon resources will be with us for decades. There will be an expansion needed in the sector. And there will need to be a lot of capitals that we look at the amount of capital that will be required to build the requirement to meet the 2040 and 2060 predictions. In the next just quarter of a century, you are talking about 25 trillion dollars. So this uncertainty about renewables and the impact on hydrocarbon resources should not really deter us from putting the right capital investment to meet the future. Otherwise there will be spikes in prices and the global economy will be impacted as a result of that. In other words, the economy may be moving in many countries, may be moving toward adoption of more non-fossil fuel power, but the percentage is so high right now of fossil fuel generation that the hydrocarbons will remain necessary and will in fact continue to grow for some time. Is that what you're? I agree with you. And even in areas where it's moving, for example, when you look at electric cars, 1.2 million, most of it is in developed countries, developed economies where incentives are provided. When you're talking about a much bigger fleet of 1.2 going to 2 billion, incentives will be difficult to be given in developing and developed countries for a bigger fleet. It is easy for a smaller fleet to provide incentives and encourage and put a lot of regulations around it. But when the fleet start to expand to 2 billion by 2040, it will be very difficult. And you're talking about 150 million, even with that, it is manageable within with the growth that we are seeing. If I may add something here, leave aside it. I'll give you one other example. La Silla was the record sales of electric cars. Yes. And what that means was less than one car out of 100 cars sold was electric cars. 99 was the traditional one is electric cars. And if we were to assume as of tomorrow, every second car sold was electric car, not one out of 100, but every second car was electric car for 25 years, global oil demand will still continue to grow. Yeah. Because the growth is not coming from cars, it's coming from trucks. One third of the global oil demand growth today comes from the Asian trucks only. Trucks in Asia are responsible of one third of the oil demand growth with no efficiency standards or no substitution impact. No, I think let's come back to this. I think some people would argue that that could change. There could be technological breakthroughs, breakthroughs in storage, breakthroughs that would bring down the cost of electric vehicles and that that could over time, that could change. It will happen. You need the infrastructure other than economic. You need the infrastructure to be built around that. And it takes years, decades for to build the infrastructure. So it's not about just having the vehicles ready. You need the infrastructure to go with it. And that will take a lot of time to build. Electric cars will definitely happen. What I am trying to say is this doesn't explain that oil demand is going to peak. So this is what I want to say. At the same time, just to add to what you have said what Aramco is doing, we are building our capacity in vitro chemicals and loops as a company. We are also taking a strong position in solar. The kingdom is looking at 10 gigawatt by 2023. His excellency, the minister just announced 30 to 50 billion dollars. His excellency, the minister of energy, industry and mineral resources, engineer, just announced 30 to 50 billion dollars of investment opportunities for in renewable in Saudi Arabia. This is by 2023 and the company is taking a strong position in renewable as well. So while we are building our capacity in oil and gas, we are also taking a strong position in renewables as well, which will diversify and hedge against the chance that, okay, let's keep going and make sure that we get to two more people here on the point of infrastructure. This is a very good point because it's key to the whole question of transformation across the energy sector. And China, if I can ask Mr. Chow, we saw recently, I mean China's big challenge, coal remains a very huge source of power in China. The Chinese government has been very committed to or taken steps to limit the growth of coal power. And also we've seen an interesting dynamic in terms of leadership on the global stage as the U.S. appears less committed to the goals of the Paris Accord with an incoming president who has signaled that he's not committed. China, for example, in Marrakesh, signaled that it very much was committed. Where do you expect a policy to go in China? And what is China Gordian doing in order to lessen its dependence on coal power? Well, thank you very much for that question. In my opinion, the Chinese government's stance on climate change and implementing the Paris Accord and taking up its social and global responsibility is an unwavering stance. It's an unwavering stance and a very firm stance. And I'd like to give a few examples of that. Firstly, President Xi Jinping at the Hangzhou summit last year made a very clear statement. He made a global commitment that China would continue firmly done the road of sustainable low carbon and green development, energy saving, changing the environment, reducing emissions will continue to be a fundamental part of national policy. That was number one. Secondly, green development, emission reductions and so forth have been incorporated in the 13th five-year development program, which has been passed by the National People's Congress of the People's Republic of China, which is a solemn commitment by the entire people. Of course, China also has commitments under the Paris Accord, which it will not fail to fulfill. Thirdly, China advocates an innovative balanced green, open and sharing development model. These are the five concepts of our development model. And a major support behind all of those is green development. Fourthly, in China, when we talk about emission reductions, there's a very strong sense of greater responsibility and greater pressure in Chinese business today. If we talk just about thermal power in China, China already has the world's strictest emission standards for coal power stations, SOX and NOX respectively, 35 milligrams and 50 milligrams, which are lower than the developed world, in fact. Now, I've just had a conversation with Mr. Birol, and we both recognize the fact that China's thermal power is large in absolute and in percentage terms. It's currently 68% of Chinese energy mix. Now, we have a country here of 1.4 billion people, and there's a historical background to that use of thermal power. So to change that mix that currently still heavily relies on thermal power is a long-term project, but that percentage is going down every year. The group I represent, China Guardian Corporation, has a total IGC of 140, 140 gigawatts. That ranks as second among world power producers, and the majority of that is thermal power. But in the last few years, we have continued to accelerate our development of renewables. Hydroelectric, we now have 16 gigawatts of hydroelectric installed, 25.7 gigawatts of wind power, both which rank us first among world power producers. We also have biomass, geothermal, and tidal generation underway. So the commitments are made by the Chinese government, but to a large extent, they are fulfilled by Chinese businesses such as mine. And I am confident that China's emission reductions and green development will see greater progress in the future. Thank you. Thank you. I think the infrastructure challenge that you outline is a very real one and is faced by power generators and utilities around the world. Mr. Storace, Adanel, actually you've been quite vocal about your perspective on climate change and the need to make change. You told a UN group that the survival of the planet is at risk and there is a pillaging we have taken for granted of our planet that needs to end. Tell us what you've done to end what you termed this pillaging. I think that it's true that we are in big transformation. This transformation has not the first that happened in the industry. It happened already several times. Technology has always been through in the back of all this transformation. So it's also in this case, technology is really driving it. Nothing new here. It's new technology, but it's always technology driving it. The scale is global. This is new. It became global in the past too. What is really new now is that for the first time, the energy industry is being transformed not only by the changes that happen in the industry, but also by some hybridization, some influence from other sectors of the industry coming into. This is the first time in which you have industries like semiconductor, consumer electronics having to do with energy. It's the first time in which you have such a big combination of forces changing. So that is the reason why we think it happens so quickly and with a speed that every time surprises us. I think the most striking example of this speed is the change that happens in China. I think a few years ago we would never even thought about hearing China being at the forefront of this change and today China is leading it. It took us three years, maybe less. I think we will continue to be surprised by the speed in which cars will become electric. The infrastructure investment to electrify a country is a fraction of what was spent to put in place the hydrocarbon infrastructure. It's really cheap. I think the speed at which manufacturers will switch to electric is going to be phenomenal and we will see cars becoming electric in very strange parts of the world which today people don't think can become electric. In general, electricity will get into the use of industries that today don't use it. What we have done to answer your question is that we basically took a step that said we will phase out thermal generation, no more investment in thermal generation and substitute that with renewables that are constantly getting cheaper and better. That is happening at the range of time. So basically as plants get close to their aspiring technical life, we don't substitute them. We replace them with renewables. Technology is helping that too. So it's a question of just I think maybe 10 years, 15. If you stop investing now, it's a question of 15, 20 years. That's the legacy we have to digest. But it is for sure going to happen. There's no question. And if you consider that the transformation is being accelerated by the influence of all the digital industry coming into this, you have an incredible combination of additional expansive use of electricity getting into areas that today people don't even think possible. You know, when steam was the primary media, trains were moved by steam. And nobody even thought that they could be electrified. We're seeing obviously in the US right now a great deal of change and uncertainty around what the investment climate will be and how the new incoming president will affect many sectors. Energy is one of them. He has pledged to deregulate and to unshackle drillers and explore exploration. Mr. Hirsch, tell us a little bit about what impact will that have and how will that affect investment? Well, I'll speak as an asset allocator with a North American perspective because they have been such a swing producer. The US federal government has remarkably little to do with the growth in the oil and gas production in the United States. The United States has increased its oil production from five million barrels a day to over nine million barrels a day under the Obama administration. Imagine what we could have done had they really wanted us to succeed. And so what has happened subsequently, because most of the US oil and gas production is on state and private lands. If you're looking for an example of technology, the technology isn't just outside the US or the oil industry. The oil industry itself has responded to price signals in dramatic ways. In my opinion, when OPEC decided in 2014 to cut prices, they were essentially looking at the United States as the high cost producer, the marginal producer. And essentially they engaged in an economic war with the US oil entrepreneur and lost and in effect brought down the cost structure of the entire planet. And now everybody is looking for ways to improve efficiency and improve productivity and the US oil producers, the Canadian oil producers and all over the world are adapting to doing better in a lower price environment. And that has created a resiliency that we haven't seen. The resiliency has led to something quite dramatic in the oil markets and that the oil markets are not just about OPEC anymore. The producers and resource dependent producers are as important as a group as OPEC was. And now what's interesting is the agreement had more people cutting who were non-OPEC members than were OPEC members. So 22 countries cut, 10 of them were OPEC members. So this is not a cartel market anymore where when you're in abundant supply producers react to market forces and they don't oversupply a market. If the US automobile market is 17 million cars, auto manufacturers won't produce 20 because that's the market. And I think that's what we're seeing is the oil business is now a real market driven product and it's no different than anything else. And so capital will flow to those places that can earn a competitive rate of return in light of the supply and demand numbers that the IEA and other people are talking about. And I'm quite bullish on the lower cost oil and gas producers because they will find a way to continuously respond and serve the market that isn't going anywhere in our lifetime. There's a lot in there. I'd like to talk a little bit more about market forces and the role that they're playing versus policymaking. But it's irresistible, Mr. Nasser, to ask you whether you agree with Mr. Hirsch's analysis of what happened in 2014 and the reset of cost around the world, whether this in fact was this showdown between American producers and well OPEC producers to some extent. Just what happened in 2014, there was more supply than demand and it mainly coming from unconventional oil and some of it from tar sand or heavy oil. And that unconventional oil that came at a million barrels a year over five years, almost five million barrels of additional supply, which is significant, put a lot of pressure on prices, put prices down. I don't want to speak on behalf of OPEC because that's not my role. But to me, there was a decision that is taken at that time that the market forces find out and balance the market by itself. And that is exactly what happened. Prices went down. Expensive producers, you saw the 9.7 million barrels coming from the U.S. went this year to 8.7. One million barrels disappeared compared to a growth of one million barrels a year. Notice the difference, the huge difference between what used to happen. So the market forces brought prices down. The recent agreement and I think it is stabilizing the market. The market is balancing. We are hoping by first half of 2017, there will be an equilibrium and there will be a growth because demand is what we are seeing is strong. There will be a need for more resources to come. And we are preparing ourselves to avail the additional resources over the long term because we don't want what happened before to happen again. If no investment are availed to the industry, prices will spike. Prices, of course, unconventional will pick up. But it will take time. The U.S. unconventional has increased about half a million barrels a day on a $50 base, where two years ago it was unthinkable that oil production in the United States would actually increase at $50. So we have brought down the cost of production, but it is now not a U.S. producer's story. There are other high-cost producers. I think it has increased because what happened between 2014 and if you look at the total U.S. production, it is 9.7. It is around 8.7 today. So there is not a low of 8.3. It has gone up to about 8.7. These days, there is a growth a little bit. By the way, some of it is coming from liquids, coming with the gas. So there is an increase in the crude side, but it is limited in terms. It will take time. They need to see the prices respond positively, sustained over a period of time before additional capital comes to the market and an investment comes, and you will see more growth in the unconventional oil. Can I put this to one of our audience members? We have Khalid Al-Fala here. Mr. Al-Fala, it is even more irresistible to ask you what you think was the reaction in markets to the decision in 2014. I know that was a while ago, but was the reaction in markets to the decision in 2014 by OPEC to not intervene? What was expected at the time? Would you have forecast the degree of the price collapse, the length that it lasted, and the impact that it had, not just on shale producers in the U.S., but on Saudi Arabia and other OPEC producers? By the way, at that time, I was in a means. I wanted to ask you carefully. Partly to the decision, but I think as an observer, I would have expected rational people around the table at OPEC to make exactly that decision, because cutting and keeping the prices at three digits in 2014 would have kept what Ken was talking about, which is one million barrels year after year after year coming from expensive North American oil. And OPEC would have had to cut year after year after year. I would have expected Saudi production to be two to three million barrels below where it is in 2017 under that scenario. So obviously, rationally, that is not sustainable. In the past, OPEC had made supply reduction decisions, but they were in response to short-term events like the Asian financial crisis, like the recent financial crisis in 2007-2008, to balanced markets, or in response to disruptions elsewhere. This was a structural deviation between supply and demand, as mentioned by a number of the speakers. Demand for oil is growing at a slower slope than before. And thanks to technology, entrepreneurship, and the skills across the industry, we're able to tap more resources than we did before. But long term, that deviation between supply and demand at $100 prices would have meant that low-cost producers would have taken themselves out of the market completely. Now, $50 oil, we're seeing a recovery in North America, and we're thankful for this. I can speak in my capacity as oil minister of Saudi Arabia, looking at the long term, in terms of decades. We need the contributions from all sources of the oil supply base. So we hope that they will be able to maintain this. My expectations is that the cost will creep up. The supply industry has been decimated, and some of them are buying jobs today at $50 oil just to stay afloat. Once they see that their clients, the operators in the shale and elsewhere, are in the black, they will start raising costs. I think costs will go up. They will be an inflation, and I think the balancing of the market in 2017 will also include an inflation on the cost of doing business. Also, what is being tapped recently in North America are the most prolific, and they're not going to provide two, three, four million barrels of incremental capacity. So as demand goes, they will go to the more expensive, more difficult, less prolific areas in the shale, and I think they will find that they need higher prices. What that price that will balance the market, nobody knows. But I think in the long term, OPEC has learned way before me that ultimately what rules is the market. And OPEC is going to try to minimize fluctuations within the oil markets, but we cannot eliminate them. Certainly we're not in the business of setting a price, $100 or $60 or $70 is no longer a realistic expectation. Some of the OPEC member countries may desire this, but we certainly cannot do it. I think Dr. Biral, you wanted to make a comment? I'm just, perhaps this oil discussion to wrap up that discussion. So there is a new oil world. This is with the shale oil coming in the picture and about the numbers, first of all, last year there was a drop, but I expect this year US production will start to increase again. The numbers, all the indications are there as a result of the higher prices. This is number one. Number two, this will go, prices will go up, US and other production will come down and put downward pressure on the prices again and up and down. Therefore, the name of the game is we are entering a greater oil price volatility. If we see much more volatile prices, because we will see the US shale oil is very flexible with the prices and I don't know where the equilibrium price is, but it is very flexible. This is number one. Number two, there is something to learn for the oil producing countries. We have seen the low oil prices in my view was a stress test for the economies of those countries, especially those who rely heavily on oil and gas revenues went through difficult times and it is the very time in my view to diversify the broadened economy of those countries and as such what Saudi Arabia is doing, Arab Emirates is doing or planning the two is excellent. But the country which suffered the most here is Russia. Russia suffered a lot and Russia is the only country, only major producing country which had a recession as a result of these prices. And the third point I wanted to mention here, when we look at the investment numbers, 2015 and 2016, global oil investments declined two years in a row and it has never been the case in the history of oil that the oil investment declined two years in a row. If there was a decline one year, next year there was a rebound. If we believe 2017 this year, if there are no major new investments are made, in two, three years of time we may well see a significant gap between production and consumption which I am not sure shale oil will be alone enough to fill that gap. So therefore in my view, alarm bells are ringing for two years of time if no major investments made this year. That's something just to add to what Fatih, you know the oil cycle even to put facilities on stream, it takes a long time talking about four to five years just to put one facility, certain increments. So to build up the capacity, you need certainty. The issue is there is uncertainty because of all this talk about renewables and the impact of renewables and whatever. Even IEA to be honest with you is not helping when they are putting their predictions or forecasts with a big 44 million barrels, a difference gap between the worst scenario and the best scenario and that will be difficult even for investors to invest 25 trillion dollars over the next 25 years. Let me just put it, it is different policies if the world goes to follow the way, a two-degrees trajectory, it will have implications under hydrocarbons but if the world keeps as it is going it will be different. So different worlds with different results. We are putting if you follow this policy we end up with this but if you don't like it follow this policy go ahead with this, pro-environment, pro-climate or business as usual or others. Why don't you jump in but I want to clarify that statement. I just wanted to take a point that Mr. Nasser just brought up. This issue of time is really important if we consider implications. The industry that needs a cycle as long as five years or longer is intrinsically risky because everything is compressed. Our decisions need to have an horizon that is shorter than that and the reason why we do that is because the certainty about the evolution of the markets, the evolution of technology, the evolution of customer behaviors, the crisis of economy is such that you cannot reliably plan ahead five years and hope you're right. I mean we have to be humbled by the experience of the last years. So what cure is there? The cure is just go in things that can get resolved in two years, that you can plan an investment and execute it within that period. That's I think a lot safer and that's actually what's killing many technologies today. That's really one of the most risky part of our energy business, the long-term view that we are used to have when the world was much more predictable. That is no more the case and either we understand and adapt and get out of technologies that require that time or we risk a lot. And the volatility of oil which has always been there, it's not nothing particularly new. The fact that it increases going forward is a classic indicator of intrinsic riskiness. That's what I think and that's the reason why we said in our company we will not plan and execute and invest in anything that will require more than three years to be realized. Which rules out also large hydro for example. Nuclear rules out nuclear. Nuclear, large coal, large hydro, but a lot of other alternatives are there. Mr. Chow, do you want to comment on that because you have to, you alluded earlier to how difficult it is in a country so big with so many needs to make a change off coal for example and that these projects are very very long-term involve huge infrastructure commitments. Tell us a little bit more about how you go about making those decisions and moving from what you have now to the renewables and other sources of power. Thank you very much. Transforming the Chinese development model and energy mix is a big ask in particular with a still high share of thermal power in our energy mix. I envy the energy mixes that you have in countries like for example Switzerland with over 90 percent of renewables. You know you have a tiny proportion of thermal and other countries are doing well. Italy for example, there's some good new energy projects in Saudi Arabia too. When it comes to China as a Chinese power producer's CEO what do I have to keep in mind? I think there may be four things. Firstly we have to make a big push for that transformation, increase investment in renewables and new energy. Every year we have 100 billion yuan of investment. 60 to 70 percent of that is in new energy and the total is unchanged for this year's investment objective. 70 percent of our investment is in renewables. So changing the energy mix less thermal, more renewables is an overall trend in China. Secondly we have to keep our eyes on the ball when it comes to technology. For example the conversion rate of solar storage and the efficiency question when it comes to wind power. Those require greater technological investment. Thirdly greater cooperation. Chinese companies need to get more international, need to work with their peers, in particular advanced companies in the field of new energy to bring some of these solutions to China to help that transformation of the energy mix. Fourthly we have to push the goal of integration we have to be more aware as power producers of our corporate citizenship as power producers and we have to try to spread this consciousness about new energy, about new energy. If everyone, if all the 1.4 billion people of China do something to help achieve that goal change their consumer behavior, reduce their energy usage then that adds up to a lot of progress. If every single person in China changes their consumer habits then that's a new kind of contribution that we can do to the world's efforts in this area. Now no country can try to solve these problems on its own. No country can carry the baton for the whole world. We have to come together and all do our bit. Thank you very much. Thank you. That's I want to, yeah sorry and then after this I'd like to see if there are any audience questions. Sure. I think that point, the last point is a great one, actually the last two points I think summarize from a capital allocator's perspective the problem. The, it took us a hundred years to get where we are now. There's 60 trillion dollars of invested capital in the energy complex globally. The estimates for the next 20 and 30 years are half again as much okay and yet all the numbers that we talk about that that money is not going to just be manufactured out of thin air and so it's a question not of just policy but of markets. You have to be doing things that are economically rational so that capital will be attracted so that you have a stable outcome. This is an eight to ten trillion dollar annual industry and any any time there's an unnatural policy that causes capital distortion to go in places that are uneconomic over time that erodes the people who are providing the subsidy and we've seen it in countries that were too early on the renewable game and they're now getting rid of their feet in tariffs because it's it's basically going to run over people that try to get in the way so we have to make this a market driven solution and the markets themselves are speaking and so technology is real the oil complex is not going away and a three to five year horizon for a single company is great but for a planet there's a massive free rider problem because there's a hundred years of installed capacity that you're leveraging off of for your three to five year horizons. The oil and gas industry is a tough industry with people having to take 10 and 20 year bets. The U.S. oil producers only nine million barrels a day rushes 11 Saudi Arabia is 10 so that's 30 million out of almost a hundred million supply and demand so the high cost producers are now elsewhere and those take long lead times they take certainty they take policy makers who understand the markets and the oil and gas industry isn't going anywhere we got to understand that the capital's got to come from somewhere. Let's get a question from the audience if there is one before we wrap up. Anyone have a question please if you can introduce yourself. I'm D. K. Saraw, CEO of UNGC India and my question or the observation is regarding the relevance of oil in coming decades because as has been seen the cost of solar has been reducing phenomenally solar is already below grid parity in more than 80 countries now the solar storage when it comes it would make a further impact the electric vehicles are coming to give energy to the vehicles from solar so I think it's time for the oil and gas companies the producing companies to wake up I think it's a good wake up call it may not happen in our lifetime it may happen maybe 20 years after but 20 years 30 years is also not a very big period in the history of industries not company in the history of industries so I think the oil and gas companies need to diversify into different type of businesses many of the country companies have already started doing it this is one and second is on clean energy this also would further motivate solar energy generation because many of the countries are already signatories to the Paris convention India by the way has already started in a big way and it wants to generate 175 gigawatt of energy through renewables out of which 100 would come out of solar 60 would come out of wind and so on so the question is to Mr. Birol is it I mean what I am saying is I'm overemphasizing or this is something which the oil and gas producing companies need to look into please thank you so I think you are not overemphasizing when as I said when you look at the numbers there is a boom of solar and the good news is the cost is coming down substantially the solar prices in the last five years reduced by 80 percent can mention that the oil industry also reduced the cost but it was much more impressive in the case of solar and if you continue this is good news having said that solar we are using for mainly for two reasons one electricity second not much known the the heater so water heater both these cases solar is not an alternative to oil solar is mainly alternative to coal if you look at this for the electricity generation not because we use oil mainly and more and more for transportation and petrochemical industry so in my view solar will go very strongly but there will be a change generally in the energy sector but there will be some constants within the change and I believe we will need oil oil demand will also grow but much less stronger than in the past as a result of renewables growth okay and we will also have a guess natural guess very good we have time for one more quick question quick thank you please so very quick question what's the future of energy as far as emerging economies are concerned I'm from Nigeria and we have a huge energy gap especially in the area of power so what's the future of energy as far as emerging economies are concerned who wants to take that one please I think you have first of all emerging economies is becoming a very difficult word there are many different economies there in under this definition but in general these are economies that have what's mark mature markets don't have that is a robust demographic growth and a robust demand growth because of demography and also because of economic development so in this part of the world you need to put a lot of infrastructure in place to supply demand quickly so again it's the issue of time it's really important and you have many solutions you can choose from today 10 years ago it was not like that you you had a very blueprint solution put some power plants put some grids and go on like that today you can choose a lot of different ways you can have a development bottom up a lot of distributed generation and build grids from the low voltage up to the high voltage and then connect the whole thing or you can try that model again big plants and go down to the villages it's really an open solution and it very much depends on what kind of let's say energy sources you have locally and what kind of infrastructure you already have if any and what kind of legacy you want to leave today we see economic or emerging economies going from one end to the other of the spectrum with a very continuous gray zone in between I think as technology becomes easier and less expensive the distributed generation first and big plants after will switch and will become more important it's easier to implement it requires less decision making and not big state-driven schemes later when when the economy picks up you might have to add higher bigger plants but I mean it's just in this very day in these very years it's transitioning from one model to the other we're out of time here I think this is a good note on which to end though because it does speak to the transformation and the kinds of change not just in what the power sources are but how they are distributed how they are used and also to the gap between the developing world's questions and the developed world's questions thank you all so much for exploring these issues with us I think I'm leaving with the thoughts actually that you summarize so well Mr. Hirsch about the role of markets as opposed to simply regulation if I walked in wanting to know more about what the impact of a new US president would be on the global climate move and the likelihood that two degrees would remain a global goal I am now thinking more about the role again of markets and investment and the 60 trillion dollars that have already been spent in building the world that we live in right now thank you so much and that concludes our update