 Vsi da so prišli na seštena o energijskih, ali o energijskih vseh, je jeziknila iz nasi panelist. V sešteni je zbivana na projekti na vseh energijskih. V forumu je začelično izgleda, da se postočna vsezina v energijskih. Tako bo vse znači, nekaj pa se je začelič, da ima način, da je tako, da je taj energijski vsezina, da je to je taj energijski. This panel will be moderated by our scientists and professor from the San Diego University, and also member of the global agenda council on energy security, that is David Victor, and I'll let David high coffe and introduce our panelists. Thank you. Great. Thank you very much, Roberto. Thanks to all of you for joining us. Let me remind you to turn off your cell phones please, and this session is open to the press. This is one of eight sessions that is looking at strategic shifts in mažar industriji, tko energij, infrastruksj, kansemčen, vzveno tudi in je tudi se bo vzvečen seznev ovednega in pravda o vseh pomega, za investinča, za dobro, in drugi ovo način doma. To je vzvečen pravi, da sem odnšljala sežveno energij. Energij je, da bi se da, če je, jedino delostih biljegov na plenet, tače se vzvečen, in tečke, da so nesmine, ne bo, da je, are very prominent and so, we do not as much as we think, you know what technology is we are going to look like in so on, today, in almost every aspect of the energy business, fossil fuel production, non-fossil production, electric power networks, consumption, everything is changing, and we have today a panel that will help us understand those transformations, which are truly profound. Let me briefly introduce our panelists, then each of them will make a few opening remarks, na naši zvršenosti za svoje zvršenosti. Zvršenosti od Kristi Klerk, ki je primer v Britevsku, v Kanadu. Prima. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. Čakaj. in nekaj ještje spostavljenja, zelo je vzbične odnivitje, tako zemljevač, in v Norega America, je sebezglasno skupnje, kaj je to nekaj inovatvega oportunitva na zelo izvoj klasenju. Mamo na Brita, na 5, nekaj, nekaj nekočne, prosesnje ciljice, in lndsje ciljice na košt, v 2020. The first one, by 2015, there's been very significant international interest in that, including from my friends at Mitsubishi, Domo Arigato, for that, $2.9 billion of investment so far. And I think those are the things that, those are some of the changes that we need to be keeping our eye on. And I think governments have a central role to play in making sure we are allowing and enabling the private sector to meet those changing energy needs. We're very much focused on that, on that in British Columbia, particularly as the, as the growth in demand changes around the world. And there's a shift also in the kinds of energy that, that are being demanded by various markets. Thank you, David. Great. Well, thank you very much for those very helpful comments. And next, we'll hear from your friends at Mitsubishi. Next, we have remarks from Jorihiko Kojima, who is chairman of the board of the Mitsubishi Corporation. Chairman Kojima. Thank you very much, professor, and thank you very much. When I look at the future of energy, and I anticipate a continued, say, structural shift in the energy mix, that used to be the demand on from fossil fuels centric to the renewable energy centric. And for that to happen, we all have to be very mindful of elements, such as the economic efficiency and also the stable energy supply and the impact of the global environment. So those are very important. The environment that runs around the topics of energy has gone through the several changes in recent years. And I would like to take up three major ones today. First one is the global economic is now slowing down. The second one is the change in the efforts to respond to the global warming. And the third one, the impact of Fukushima nuclear power plant accident. That occurred last year, March 11th. First, there is a growing consensus. That would economic growth will stay as low as around maybe 3% GDP growth for some time. The weak global economy will preclude any strong growth of fossil fuel demand. And if you put together this with the fact that share gas production in North America and Canada, of course, and elsewhere is growing and you can expect less risk of soaring fossil fuel prices. And unless we came to the face some major geopolitical event, maybe there is something may happen. And secondly, regarding efforts to address global warming, I have an impression that CO2 reduction has gone down in the list of priorities for governments these days. And developed countries are struggling with tight budgets. Also, I hear some people arguing that the scientific basis for the causes of global warming should be scrutinized more carefully. And the point of the thirdly, regarding the impact of Fukushima nuclear power plant accident, many countries continue to use this nuclear power. And, however, except some of the countries, they stopped to use the nuclear power. And even in countries that are still using nuclear power there, public debate has resumed on topics such as the need to review safety standard and the appropriate disposal of the radioactive waste. And the growing debate and the objection may create, say, hesitation, the continued use of nuclear power plant. And as a country where the accident actually happened, say, Japan has the responsibility to carry out a straw and the complete analysis of the event and to establish proper safety standard based on the findings. And that's very, very important. Then analysis and, say, studying of the Japanese government is now underway. And we do expect some message will be coming out. So these are some of the major changes that surround the world energy scene today. And they make the shift from the fossil fuel to renewable energy more challenging. I believe we would need to assign a bigger role to natural gas, including shell gas. And the likely scenario is that during the next decade or two, we will mainly, depending upon the increased production of the natural gas. And if possible, also on nuclear power generation, so long as the safety can be ensured, that is also very important. During the time, we need to invest in technological innovations that lead to cost reduction and stable supply of renewable energy. And then after that, the use of renewable energy will become more widespread, making it one of the leading energy sources in the energy mix. So those are my thoughts on the energy supply side. But the other side is the technical innovation and the government policies are equally important on the demand side. And if we hope to make any serious progress in energy conservation, well, in Japan, as you may know, both the private and public sectors got serious about energy conservation after the oil shock you may remember in the 1970s. This sets Japan under the law to becoming one of the most energy efficient countries, the initiatives taken at the time have also helped us to curtail CO2 emissions. Now, having dealt with the Fukushima nuclear accident, Japan is once again faced with the challenge in energy. We must exhibit even greater innovation and creativity to develop a new energy mix that is safe, reliable, and sustainable. Thank you very much for those remarks. Next on our panel, we'll hear from Daniel Jurgen, who is chairman of IHS CERA, the leading energy consultancy and author most recently of The Quest, which was published in Chinese on Saturday. Dan? Thank you very much. I think if we are looking very short term, following from Mr. Kojima, says, and we look at the oil price, we would say, here in all the economic news analysis that we hear at this Davos conference, we would say the oil price should not be $115 a barrel, but it is reflecting the tension between on the one hand a slowed economy, even in the last session we heard as a potential double dip, but at the same time the tension around Iran, the question of sanctions, and I would just say that this is not a stable situation with Iran, and the whole mechanism of the sanctions were in very uncharted waters, and so I think you should expect that some things will probably change in six months to a year. On the question of the future transitions, that's some work that we're doing with the World Economic Forum as part of the energy community, and I think a conclusion that we come to is one that surprises people, maybe it's not what they want to hear, but energy transitions don't come fast, the lead time in energy is just much longer, and I think this is something that the venture capital community has discovered. There's no question that we've had a rebirth of renewables, I think it's fair to say wind is not alternative anymore, wind is another form of conventional generation of electricity, the renewable business has become a global business, last year is about $150 billion, but it's still small when you look at it in terms of the overall scale of the energy industry, and something that we found, we're doing research now, a project on the future of coal in China, and one of the things that really struck us, when you say, since 2010, ask yourself the question, what's been the biggest growth in energy, and you probably might say, it might be solar, something like that, but of course it's been coal, and the growth of coal on an energy basis is ten times the growth of, say, renewables, so wind has grown a lot, but what we see is the conventional energy, so transition will take longer, but there are a couple of things to say, one is that we do have a globalization of innovation, Mr. Kojima talked about it, the needs are urgent, I think Japan is going to kind of push to the forefront of energy innovation again, and certainly in terms of battery and electricity storage, which is critical for renewables, I know Christina is really the expert on that, and we'll be able to learn from her on that. So the other thing I just want to talk about, and it's a footnote to you, Madam Premier, but a large footnote, you talked about Canada and the awesome role that British Columbia will play in the global gas market. This shale gas revolution to the south of you in the United States has really been extraordinary. It was 20 years that it was going on, the innovation, no one paid attention to it, people thought it was a joke, another five years to implement it, then 2008 after 25 years of innovation, it burst out, and it is probably the biggest single innovation in the energy seen just because of the scale of it and the impact of it, it's gone from being 2% of U.S. natural gas to 40% almost, instead of the U.S. being about to spend 100 billion dollars importing LNG, the political debate in the country is about exporting it, it's now carried over to oil, so U.S. oil production is up 25%, and it's amazing that we're now having a debate in the United States of political debate that would have been unthinkable, a debate about how much the U.S. should be, like British Columbia, an exporter of energy rather than an importer of energy, and our political discussion has changed towards that. It's had one other impact, because natural gas has pushed coal out of electric generation in the United States, of course the coal is being exported to other places like China. U.S. CO2 emissions have fallen much more rapidly than had been expected, and that's one of the unexpected consequences of it, but I think big question now, and it's a big question for China around the world, is this primarily a North American phenomenon, or is this going to be a global phenomenon, and that's a subject certainly worthy of some serious discussion. Thank you. Dan, thank you very much, and we'll, I think in the discussion we'll come back to this issue of whether and how gas, shale gas scales, because I think that's very, very important. Next on our panel we have Kristina Lampa-Onerud. She is founder and international chairman of Boston Power, and as Dan mentioned, Boston Power is a key player in batteries, which are so important to many of the kinds of innovations we're talking about in the energy business today. Kristina? Thank you. So it's fascinating, we sit here to discuss energy. I started a company seven years ago, where people were just merely recognizing the revolution of mobility, and having an opportunity to play a role as we slowly transform our markets and our use and our thinking around energy has been truly remarkable, actually. When we look at sustainable systems and the fact that we need to basically integrate new innovation with existing infrastructure and existing energy paradigms, the question is no longer local, no longer, not national, but global, and that makes, of course, the challenge bigger. But the opportunity is so incredible to me, as we recognize climate change, and we recognize economic upside with cheap energy, having learned a little bit from the last 50 years, what that meant for strong growth economies, to now think about not only global supply chains, but also almost like Lego pieces, where you have renewable energy from solar and from wind, from geothermal and from water sources, to be stored to take care of off and on peak our demand, where you can basically generate sustainably, store and augment the energy paradigm that we live in. I agree also it will take a long time before we have a shift, but I think it's so incredibly important that we think of technologies that are here today to offset our carbon footprint and the 11 other gases that are harmful to the earth, at the same time as we deploy these new technologies together. So the thought that we could basically leverage existing infrastructure in energy, and renewables can come in and offset some of the biggest downsides, take just the peak hours between typically 4.30 or 5.00 till 8.30 to 9.00 p.m. daily, where people come home from their work, industry is still running, there is typically a peak in every economy. Once the electric transport becomes very large, you actually have energy storage inherently in your car, in your garage, where you could in principle run your household from a large battery that you haven't used everything for transportation, or where you were away at work, captured some of the solar power and stored it for your use just those few hours, or even think about the opportunity that each one of us become an energy trader in some level by just monitoring use. So the revolution of knowledge, the opportunity of hyper-connectivity and transparency where we actually know how we use energy, what it actually costs, and the stimulant of this global discussion of global economies, I think will spur innovation and innovators and new collaborations at a pace that we have never seen before. Great, thank you very much, and for the last of our opening comments, and then we're going to go to a discussion with the panel and a discussion with all of you, we have Lin Bo Chang, who is the director of the China Center for Energy Economics Research, a leading institute in China working on all matters of the Chinese energy system, and is also chairman of the Global Agenda Council on energy security here at the World Economic Forum. Thank you. I just follow on the topic of innovation. We all know that innovation is going to hold key to the future of new energy, such as solar and wind power. And innovation is a key because it can lower costs of new energy, which is particularly important for developing countries, to be able to utilize the new energy, solar and power in a larger scale. Now, let me give you an example. We all know that China's coal-fired power plant provides about 80 percent of electricity, and we know it's not good. So about a few years ago, the Chinese government began to discourage coal-fired power plant investment, and we see the very good results that has been coal-fired power plant investment has been declined continuously for about six years in a larger quantity. We're supposed to be happy, right? But not. Now we begin to worry about that the coal-fired power plant decline might be too much. And the reason for that is that the new, the solar and power with so-called new energy incremental is not sufficient to cover the incremental of demand and most of the loss in the coal-fired power share. We're going to solve it together, provide about less than two percent of the electricity in China. And if we now begin to worry about if the trend of the coal-fired power plant investment decline continuously in about three years, China is going to face a huge power shortage. So now we might have to begin to go back to encourage coal-fired power plant investment. So now give us the idea that the new technology, the one and solar, not only need to be, cause need to be lower and also need to be developed in a large quantity to meet incremental demand and also to whatever we want to replace. Now, how do we do that? I think that after this point that we have seen that a lot of trade problems trade conflict. There's an investigation on the one and solar ongoing from United States and also Europe. I would suggest that the possibility of international alliance in terms of how to support one and solar, the new energy technology, not just from a point of economic growth, also need to be from a point of how to address CO2 issue altogether, globally. And because this is important is that because due to the recent trade problems it's going to slow down, it's going to hurt everybody. It's going to slow down solar and wind industries substantially. Now, follow this point, how do we do that? I think there might be a need to distinct a bit between the old technology and the new technology. Maybe we can provide a more tolerance and more space for the new technology. I'm not saying that we don't have to follow the rule and regulation under international trade, but can we make a slightly distinction between the two, such that we can support this new industry, not only in terms of technology flow, also in terms of the flow in a larger quantity. Of course, by doing that, we need the government and private sector all get together. And I think it's an important issue. I'm also critical issue need to be addressed now. Thank you. Great, thank you very much. I'm going to start with a couple of questions to the panel. Overall, we're having a discussion up here, and I would urge you, who want to ask a question to get your question ready, because I'm going to turn to the audience in just a moment. The first theme I'd like to pursue is innovation. Everybody in their remarks in a different way talked about innovation, the role of companies, the role of the government in this, and so on. So I want to start with you, Dan. Earlier you wrote a book about really the relationship between government and private industry and how that relationship is managed. And I'm wondering if you could comment about what needs to be done on innovation. The Western countries right now, all of them, it seems, are in serious financial trouble. There's going to be some role for the government to spend money on innovation. There's going to be some role for new regulations and so on. Yet it seems like government is just struggling to survive. So help us start to think about what could be done to radically improve the rate of innovation in the energy business. Well, I headed a task force on energy R&D during the Clinton administration where these questions and the thing one struck is how funding goes up and down. So and we can see it now. We've had in the U.S. a big surge of spending and a notion of really creating frontier research centers. And now it's that funding is threatened. So I think the era of austerity puts a lot of pressure on this whole thing because part of obviously a really critical role of government is to support in a sustained basis that kind of first part of energy R&D so people can make careers in that and the up and down is not good for that. The other thing is that of course innovation comes from large organizations. It comes from universities. It comes from individuals with ideas. It comes from people who have ideas that other people regard as crazy and we've seen it again and again. And just the story of shale gas is very interesting. It was basically one person who for 15 years believed this was possible and the people working for him said, George, you're wasting your money, you're wasting your time. But he said, it's my money and my time and I'll continue to do that. And that's what occurred. So I think there's not a single recipe except to allow a lot of space for that, for different ideas to persevere and to create a sustained platform so that the you know, just end by this. And you know, in the quest I said that we're not we'll see a lot of growth in renewables and alternatives. But the points that others have made is that the overall energy mix will grow and so that the changes probably come after 2030. But those changes, the big changes will be the result of things that are happening now. So it is a 20 or 30 year lead time and that's why, you know, maintaining that commitment and that's going to be tough during an age of austerity. Yeah, well, I think there are a couple of experiences we have. One is, we are the only we were the first jurisdiction in North America to introduce a carbon tax and it was essentially a tax shift. We reduced personal income tax and business taxes by the same rate that we so that we it ended up being a revenue neutral to government. We thought that that showed great leadership. We had a serious problem of fallow ship in British in North America after doing that. So, but it has made a real difference in terms of attracting clean energy businesses to British Columbia. That's an example of something government can do where you're really you're creating a shift in behavior without adding to the total tax burden. The other, I think the point about investments in universities is a very, very good one. And so University of British Columbia set a goal to be in the top 25 universities. Government invested very heavily in the university and now I think it's top 21 or 22 in the world, leading in innovations in clean tech. The third point I would make around shale gas is we have set a goal to have the cleanest LNG in the world. So we want our LNG plants to be principally fueled by renewables. That's going to now we're a we're a hydro we have a lot of hydro electricity in our province. It won't be enough. It's going to drive we hope a huge boom in investment in renewable technology across the province. That we hope will attract investment. So again, what we're trying to do is create a private sector market for clean and renewable energy. And it will be driven. We hope by shale gas and we hope that ultimately those innovations will be innovations that will be exported around the world so that everybody can be producing clean gas. So let me ask Kristina you started a company whose economic logic in part is rooted in the concerns about climate change and shifting to alternative energy sources in this case on board storage and electrification of vehicles. How do you survive in a world where the government thinks it's poor where we're not doing followership followership in the United States on climate change policy. But what are you looking for from from government to help boost the kinds of innovations that you've been working on. Thank you. So I started the company in 2005 with the realization that innovation in storage was very mediocre. Percentages increase of energy density, energy density was all that drove that market. And with the recognition that if you made a step change in energy density tuned into cost and allowed fast charge you would basically shift the paradigm and then safety and green was actually equally important on our design agenda. When the economic crisis of 2008 hit the company where we already had revenues from HP, Lenovo and Asus Tech in the laptop industry and also in the medical portable electronics market had just started qualifying into transport. Frankly, China's long term strategy was an unbelievable opening to us. So we were in China day one to partner with global supply chain and manufacturing I had the vision early on that if you can transform the paradigm of cost performance and I think this is really important to make as a point in the end renewables will compete on a dollar per kilowatt hour. And it's in finished packs and we had a way to do that with chemistry mechanical engineering and the electronics so basically a finished block that can interact with the device. We had a chance to do it in China in a way that couldn't frankly be done in the United States or Europe at the time because China had set out for the same reasons that you mentioned in your opening remarks for the last seven years every five year plan says we have an energy problem in China, we will solve it and we're committed. We didn't take government funding nor from the United States or Europe or China. We got operating offset of capital in China, but it's really all the subsidies are going into end markets and just maybe an illustration if I may to illustrate how simple that policy can be. So the mayor of Beijing says I would like to have electric vehicles. And let me formulate that in a way so everybody can understand. If you want to buy a gasoline driven car in Beijing today you enter into our lottery and then if you win you can drive. Every other day if you buy an electric car you're welcome to drive immediately and it helps Beijing with the noise factor, the pollution factor, the particulate factor and it drives a market opportunity and the subsidies actually go into the market not as Europe and the United States elected to bet on companies. So that's a better policy from an entrepreneurial innovators point of view because it makes the capital bets much shorter. Let's talk about China's role in this. There's a terrific article on China's energy innovation system written by Evan Osnos in the New Yorker about two years ago. Just a lovely article. We've just heard from Christina of your experience with innovation and the role of China's strategy in this area. And so help us understand Lin Bochang. Does China have an advantage in this area of innovation, long term innovation, especially in energy that frankly other countries don't have and what is China's role going to be in the international landscape of energy innovation? I think that for China at this point that the most important advantage is market. Large incremental intensive energy demand is really in China. So the market itself will provide sufficient encouragement and most of potential for any innovation and investment in the new technology innovation in that perspective. The second one is the cost of research is relatively cheap in China and given that the gap of technology is really not a further part in the new energy technology, I think that China get a very good potential at this point. But what I'm still worried about is that given current situation, it's really not good for the new energy industry at this point. Normally the innovation will require funding and funding from come from both at least two major sources. One is from government. Given the past experience I have been observed in China is that the government, central government where haven't done much actually. There is an investment in the innovation, but really not that much in terms of the skills. The local government are really interested, more interested in the equipment because they come quickly. So the results, the innovation funding is really lacking at this point in China. And we're hoping that the situation will change in the future. The second source of funding obviously come from enterprises. But the precondition that the company had to make money to have an investment in the innovation. But if you look at the one power and solar, particularly at this point, they are all fighting for survivals. So put two together the given that the China's advantages, we still have to do a lot to encourage the innovation. And while you have the floor, let me just press you on one aspect of innovation in China, which concerns shale gas. Everybody in different ways has been talking about shale gas. You can't go to an energy meeting anywhere in the world today without shale gas being. It's like a love in about shale gas. And I'm wondering if you could comment about the potential for these innovations to spread in China. You and your opening remarks talked about the difficulty China's had in reducing incentives to build coal. And in the United States, the big impact of shale gas has been to shift from coal to natural gas and electric power generation. How quickly should we expect these innovations to spread in China, shale gas innovations and what needs to be done to accelerate that. I think that if China really determined to go for the shale gas, the technology is a problem right now, but can be addressed very quickly. Given the past experience in other energy sectors in China, they usually can do it very quickly. But there's a problem with shale gas. One is there, as a major one is the water. If you ask me what is the most scale resource in China, I would say water, not energy. OK. And anything you have to compete with water, you certainly will lose. So given the water situation, the shale gas technology really need to be improved for the to make sure that we do not consume too much water. And until that time, I think that China will have will move much more quickly. But I think that in about two to three years, I wouldn't believe that. There will be a huge movement there. Let me ask one more question in Mr. Kojima. In your remarks, you talked about Fukushima and obviously the situation of Fukushima is terrible. A year and a half ago, if we had a panel discussion that talked about the future of energy and concerns about climate change and so on, lots of people will be talking about nuclear power. Fukushima has changed that. A year and a half ago and when someone has asked, what's the country that's done the best job of scaling up nuclear power? Japan would be, if not the top country in the list, the top two country in the list. Fukushima has changed that. What should the rest of the world learn from Japan's experience with Fukushima? And as chairman of Mitsubishi, what is your outlook for reactors outside of Japan? Obviously, there's a special situation in Japan, but the nuclear revolution really concerns other countries. What's your outlook on that? Well, a nuclear power plant situation in Fukushima and what the government is doing is that they are now analyzing why this happened and also they are studying how to protect this in the future. And the next one is the also how to make the security standard for future and also and they are studying the energy best mix for future in Japan. This message is also very important to the all countries in the world. And we are waiting and still they are analyzing but it's not so easy. They are now communicating with the in the government and also in the industries level and also the academia level is the university level. And the communication is very, very important. Therefore, we are expecting some message from Japan will be very much helpful all throughout the world, I think. And say nuclear power plant is very, very important from the cost viewpoint and also from the security viewpoint if we can fix the analyze in the standard level and I think we can protect this kind of things again. And therefore, it may take some more time. And now the nation's emotional mood. It's a bit difficult to therefore, but it may take time but I do believe that some good message will be coming out. And then under such circumstances we, I always said talking about the energy the three important points is one is the technology. And the second is the cost. The third is the time frame. Always we are looking at those things and as you may know, say, Japan is the maybe advanced country for the energy issues and therefore, even our company is working for the sometimes, say, electricity for the nuclear power but also we are heavily involved in the renewable energy. And also, our company is involved in the LNG business throughout the world. And we do hope share gas will be of great help and of course, for Japan and for throughout the world. From the viewpoint of the technology and the cost and also the time frame it may take not so long time but this kind of thing is very important. OK, thank you very much. So now we have time for a number of questions from the audience who would like to raise a question back here on the right hand side. I think a microphone right in the middle. You have the tallest hand, so you win. Please introduce yourself. OK. Yes, my name is Salim Ali. I'm a professor and director at the University of Queensland in Australia in the Sustainable Minerals Institute. I'm curious to hear the panelists' views on IRENA, the International Renewable Energy Association Agency which was just established last year as an international entity and also the Energy Charter Treaty. Are these efforts of likely to be of much use in this planning phase or is this really very much a macro level effort with not much relevance on the ground? Would somebody like to say something nice about IRENA or the Energy Charter Treaty? That's silence. What's about you, David? I think it's... Well, this is on the record, so let me change what I was going to say. I think these activities follow what's going on in the markets. They don't lead. I think the Energy Charter Treaty was designed to advance investment in one country, Russia. And that country has been the least involved with this. And we have lots of struggles with bilateral investment arrangements already around the world, witness the judgments against Argentina that have not been collected on. And I think IRENA is largely a place where people can talk about what's happening in the renewable energy industry. But the fundamentals in that industry are the things that the panelists have been discussing. They've been innovation in batteries, cheap gas, which is disastrous for a lot of the renewable energy industry, and fiscal austerity, which is a big, big problem for a lot of this industry. Another comment or question right here in France, please. Thank you, Chairman. Master from Japan. I have a small question to Mr. Kojima. You talked about the oil shocks of the 1970s and Fukushima shocks. And recalling after the oil shocks of the 1970s, Japan became a completely new country. And we got a lot of innovation in the 90 years. So what is the impact of Fukushima? Japan will be reborn again and could send good messages and lessons to the world. What would be the lessons and messages Japan could send to the world after Fukushima? Thank you. Thank you very much. I have the same opinions. Now this is the timing for Japan to reborn. And because, say, we have already studied the renewable energy, of course, but the renewable energy, the problem is the cost. And also time frame. And also the technology is getting better, but the feed-in tariff system is very, very expensive and for the government. But therefore, total, say, gap of the nuclear power plant cannot be covered by the nuclear power in Japan. Therefore, now the time for Japan to reorganize, reconsider what's the best energy mix in Japan for future. But it may take some more time. That is my understanding. And somebody says, forget nuclear power. No, it's not so easy to forget. And however, the energy best mix and should be in nuclear power will be reducing. And this will be covered by the LNG for the timing and for the long time basis nuclear power plant, renewable energy plant. And therefore, now I think it's a timing for Japan to recover, to reborn, to reconsider. Can I just press you a little more on that question? What is Japanese industry going to do about the cost, though, because imported LNG is priced basically against oil. There's also significant amount of oil in the mix. Your factories are competing against Chinese firms that have a much lower cost basis. At some point, this seems very, very difficult to sustain. How is the industry going to respond? As you may not say, Japanese industries heavily involved in how to make the energy-saving manufacturing. And also, Japan is a non-resource countries. Therefore, we are importing the resources from outside for a long time. Therefore, under such circumstances. And what's the best way? Every industry is seriously thinking about. Some of the industries may go out from Japan to the outside. Most of them are still staying in Japan to manufacturing the products based upon the a little bit higher energy, but may get the more competitive price that they are always having. That is Japan's main focus, I think. Thank you very much. Another question. Right here, sir. And then the next one will be... You're going to get two microphones in a moment. Hello. I'm Johan Barats, Minister of Economic Estonia. And probably I'm a question to Mr. Jerrigin, but maybe also Mrs. Clark in response a little bit. And the question is about the oil shale. You talk about this revolution, which is now happening, shale gas. You had a very good sentence that there was a man who wasted time and money, but now shale gas is there and everybody is looking at the potential. Also in Europe. Polish doing a lot of work and stuff. But the shale oil, or oil shale. I'm asking because Estonia is one of the countries who are really using the oil shale. We are producing oil. We all know that this conventional oil is going more expensive and Canadians using sand oil. Biggest reserves of the oil shale are in the United States. 75% of the reserves of the oil shale are existing in the United States. How do you see the next 10 years? Because we all know that the demand of the oil will increase. What is going to happen with the oil shale? We just want to underline the importance of the renewables, but especially this year. How much do you produce? I know you produce in Estonia, but how much do you produce? Not significantly comparing the world demand, but we are really developing now and we produced 20,000 per day, something like that. Also China is more and more using the oil shale. The question is what will be in the next 5 to 10 years? First let me clarify one thing. There's oil shale, which is what you're talking about, which is the kerogen, which is the immature oil, and there's shale oil, which is what is produced using the same technique as shale gas, and it's really, we call it tight oil. To begin with, it's confusing, so just to make it clear that I'm not talking about shale oil, but you're talking about oil shale, and the United States has immense deposits of this. Way back in 1917 National Geographic wrote an article saying how at that time the world was going to run out of oil, which has happened several times since then, and it was going to be oil shale, and it was going to be what everybody was going to get their gasoline from. And there was a big boom in the late 1970s and early 1980s, and then it turned out that it ended abruptly in 1982 because of the costs. So oil shale in the United States has just been pushed off. There were water problems or environmental problems. Today there are some companies who are trying to still find new technologies to develop at scale in, I think, Utah and Colorado. There's a project in Israel, also using that same technology, but you have to say this is very early, and the fact that you've had this shale oil, tight oil come along, and suddenly the biggest growth in oil production in any country in the world in 2008 has been the United States, that that tends to push off the oil shale, and again it's a question of people being committed and spending R&D dollars, and so in our own numbers when we do reserves we think at some point this will be exploited, but it doesn't see, you know, it's still something that's quite down the road compared to these other things, except in Estonia where you're a pioneer. Well, just to give you a sense of, I mean, I agree with you, Dan, that it is often the future. For us we're talking about by 2020 being net exporters 40 trillion cubic meters of cubic feet rather of liqified natural gas. We will be in the top five in the world. It's the equivalent in energy terms for shale gas of the export from the Alberta oil sands today. So it's a very, very, very large project, economic project for us, and so the tight oil or the shale oil is something that it's very difficult, I think at this point, to predict its future, given how quickly not just Canada but other countries around the world are moving into gas and the appetite that we're seeing for the use of gas in countries like Japan, Korea, an appetite, of course, in China and India. I think for the next little while that's where the action is going to be. Right, but I should add, I mean, obviously China, too, has an oil shale industry that goes back to the 1930s and I think maybe somebody here will know how much development effort it's gone into it, but just as you say a very little bit, but just to add the resource of this oil shale in the United States, I mean, it's huge, it's sometimes measured at 7 trillion barrels, it's just beyond the cost curve of everything else right now. Question back there, please. This is Bing Song, I'm from China, this news, the Tsai Jing Yu Bao, and I have a question for Mr. Yeo Jing and Mr. Kojima and Mr. Ling Boqiang. So we can see that the global energy structure and the landscape keeps changing and when we look into the future, I'm wondering, have you ever thought about what will be the greatest risk we will face in the future in the field of energy and what will that risk imply maybe in both political and economic perspectives? Thank you. I think Mr. Kojima should start. Kojima, what's the biggest risk in this long-term energy future? Well, the biggest risk in the energy issues for a long time, maybe that is the question, right? OK. Is what? OK, then my response is every country is now, say, using the energies in the very high level. Therefore, 2050 almost 35% total energy volume will be increased in the I heard. For that sense, the other one is the saving energy side, demand side. But supply side is very, very important in that sense to keep the economic level in the throughout the world. And for that purpose, number one is the fossil fuels. And of course, even in the core is very, very important resources. And in Japan, we are now analyzing the carbon-captured storage technologies. How to reduce the CO2 even from the core. And also from the crude oil. And we are doing the same things. And the long-term basis and those important resources is how to save the, say, CO2 level in the lower. And the second one is the very important resources in the LNG. And the LNG is the recreation natural gas. And also this is in the sense oil gas and oil share, not oil gas, share gas and share oil. Both of them are very, very important. And under such circumstances, how to protect those energy issues. Also we have to analyze the nuclear power plant technology more. And the technology level should be analyzed and the nuclear power plant technology should be getting more important. That is my understanding. How to make those total energy best mix. That's very important. But in that sense, renewable energy, it may take some more time. But in Japan, talking about renewable energy, best renewable energy in Japan is the wind power and the geothermal. Therefore, country by country, renewable energy is different. And in Japan, not so strong solar power. Thank you very much. What's the biggest risk in the future? I think that in my view there will be price. The reason I'm saying that is innovation. If somehow we can manage to have a technology breakthrough to bring down the new energy cost substantially. Otherwise, no matter what subsidy what, the energy cost is going up. And also if you begin to looking at the trouble spot, the tension also point to energy cost. I'm not sure that. For economic point of view, I don't believe we are going to use up energy. Maybe it's going to be unaffordable to poor. And also very likely the energy price is going to become a major macroeconomic indicator in the future. Dan? Well, they were talking, gave me time to think and make a list. I don't think that there's a, you know, it's hard to single, a single one, but I'll just mention a couple. One is I think what Dr. Lin just said, basically the threat to GDP, the threat to the growth that would come from price. And kind of one of the themes I came to conclusion when I was finishing the quest was this notion of what somebody called Mr. Carnot actually called the great revolution which began with the steam engine and we constantly have innovations that surprise us. And I was wanting to hear more from Christina about storage as part of that. So I think that's one. A second one is political conflict over energy. And then there is a energy security issue. The classic energy security issue which revolves around crises in the Middle East, disruption, regime change and often we can predict them but we can only predict them after they happen because they tend to come as surprises. The other one that I think is on the agenda, people knows there, people don't know quite how to deal and I hope that we being international community countries and companies find a way to address it is what the former CEO of Sony called the bad new world of cyber vulnerability and I think that's just hanging out there as a threat to there's no infrastructure that's more critical than energy and I would put that really at the top among the top risks that we're going to see in the years ahead. Okay. Boy, that's a long list, the three of you that you don't sleep very well at night. We have time for one last very brief question if there is a question from the floor. Right here, sir. While we're waiting for the mic, my answer to the question is cheap oil. A lot of things we worry about, like global warming and so on, are going to go out the window if there's very cheap oil in the future. May some wonder from the United States, I have a question from Mr. Jergin. You mentioned in your introductory remarks about Iran and the sanction and you just mentioned the risk that it imposes. I was wondering the effect that these sanctions have which are meant to hurt the Iranian economy and but it also has an impact on the rest of the world because the price of oil is now well above what it should be and we remember not long time ago the price of oil was like $15 to $20 a barrel so it creates a great uncertainty so the prices may actually go back to those levels and therefore all of these big investments might be up in the air. The question is whether you think at some point these risks and these costs to the rest of the world will be demanded from the United States or you think the rest of the world will just absorb these costs as part of the realities of life. What do you think? I think there are two parts to your question. It is true, when I was writing my book I went back and looked in 2004 the absolute consensus was that oil prices would be no higher than $20 and here we are eight years later and $115 is a price that goes on in the world although as the G7 said about two weeks ago this is actual heavy additional weight for the world economy to carry and it is in part the result of the tension that surrounds Iran but the big jump in price when you look back on it was really what is price, it's a piece of information that the world had changed it told us that we were not going to be in a world anymore in which the OECD nations dominated energy demand oil demand but indeed the rise of the emerging markets and price had a rise to send a message both to consumers and to producers that we were in a different world and it has done that as to where the you know what I think we have seen with some urgency look towards the IEA it said the international energy agency needs to think about releasing supplies or at least that should be on the agenda and I suppose that will be in the agenda you know just yesterday the Saudi oil minister put out a statement saying these prices are too high they have to come down so there's a lot of concern around them but it also reflects the reality is that there is this kind of let's call it a standoff over Iran's program right now it's sort of on and off the front page but it's very real and there's a kind of build up of tension and that tension is reflected in the price and that kind of goes back to the preceding question about what kind of risks are out there well thank you very much I think we are at the end of our time so let me just say very briefly we have talked about at least three big things today one of them is innovation this is tremendous what's happening in this business from batteries to shale gas and so on it's also tremendous to think about what the potential is for the future but that's going to require some strategy and vision for innovation in the role of the state vis-a-vis business in that area that's a topic that I think the forum could probably do some useful work on second is shale gas clearly a really big deal in North America big questions also about how rapidly technologies scale on the rest of the world what could be done to accelerate that process and the third I think is this question about nuclear after Fukushima a year ago in the immediate aftermath of Fukushima I think people were very dark about the future of nuclear power and now we've heard a much more nuanced view it's not clear what's going to happen in Japan especially not clear how much Fukushima has actually affected the spread of nuclear power around the world certainly we need to learn the right lessons from the Japanese experience here please join me in thanking our panelists for a terrific discussion