Transcript
Recorded week of March 17, 2026 — a follow-up episode with James Gutman, two weeks after the U.S.-Israel war on Iran began.
Jigar Shah: James Gutman, back by popular demand. I know it's like midnight where you are in London, but I appreciate you jumping back on the podcast. You were on March 2nd, I think we're on like 17 days into this conflict and inquiring minds want to know why you got so much stuff wrong. No, I'm kidding.
But I think that you gave our listeners a framework for how to really think about what was happening. And it really was under The New Joule Order framework applied in real time. You talked about the price spike, you talked about all these other things — two weeks in, what are you seeing?
James Gutman: Gosh, well, let's start with what I got wrong. And I think the big one is I said we would measure this in days, not weeks. And I want to go on that because clearly we're moving into weeks.
When the U.S. didn't win — whatever win means, because it's not really clear to me what those objectives are — when the U.S. wasn't able to say we've satisfied our objectives in the first three days, then I think at that point, the optimal outcome was to declare victory and walk away. Because where we are today was in many respects a forecastable event. The Iranians, with decapitation strikes, putting them basically against the wall — they were going to push the economic nuclear button and close the Straits. When the U.S. is in a position where that's the obvious next step for the adversary, you walk away. Why would you do it? For whatever reasons, we decided to double and triple and quadruple down. And so we're still here. The Iranians have pressed the button.
And so we're now in a situation which I didn't expect to happen. I thought that the U.S. would have cut its losses by now and gone home. We didn't pull off Venezuela, so move on. So we're now in a slightly different world than the one that I was talking about before.
What hasn't happened is we haven't seen a sort of collapse in consumer confidence. We haven't seen a collapse in the financial markets. We haven't seen everybody sort of panicking, in the U.S. in particular, in the way that you might expect given the magnitude of the disruption. And I think there's a couple different reasons for that. The U.S. is, as I said before, to a great extent insulated from these events in the Straits of Hormuz because U.S. consumers are able to consume natural gas which is domestically produced and has limited exit opportunities. Barely moved.
Jigar Shah: Yeah, I mean, the price at the Henry Hub has been relatively unchanged. Certainly gasoline prices are up 60 cents a gallon. But well — I mean, politically, it's a lot. Once you hit $4 a gallon, folks start to lose elections. But I agree with you that the percentage of people's salaries that fossil fuels represents was at its peak in 1973, was lower during the first Gulf War, and is much lower today. And so we're going to have some inflation just because energy going up by this much is going to flow through to fertilizer and all sorts of other stuff. I agree with you, natural gas prices remain low in the United States.
James Gutman: Yeah, I mean, I think one of the things we talked about before was that the implications for the rest of the world were going to be extreme and dramatic, and the implications for the U.S. consumer, at least in the beginning, were going to be a lot lower. And I think that's one of the reasons why the U.S. is doing this. Because we kind of look at this and we say, well, it's not that bad. You say 60 cents — 60 cents is not the end of the world in the same...
Jigar Shah: Well, that's certainly Trump's point of view. He thinks that everyone makes so much money that 60 cents a gallon is immaterial to most family incomes, even though I think a lot of his MAGA voters probably think otherwise. Let's just go through some of other things you said, right? So I think one of the things you said was that Iran was going to let its friends send their oil through the Strait, but not their enemies. It does seem like that's happening. Is that how you read it? Is it a two-tier system?
James Gutman: Yeah, so it's more than seem — it's becoming pretty explicit now. The flow through the Straits never really went to zero. They went down quite a lot, but you were still getting something like a million barrels a day pushed through. And that was almost entirely Iranian flagged and owned tankers. Now what you seem to be getting is you're starting to get Chinese, Pakistani, Indian tankers and cargo ships who are being granted safe passage. And it seems that what the Iranians are trying to do is to funnel them through a strait which is very close to the Iranian coast as a way of checking them. So this is just a report that I've heard — as a possible indication that what they're implementing is sort of a long-term strategy to try and manage who gets to go through and who doesn't. And that's kind of what you'd expect them to do, right?
Jigar Shah: Oh yeah, no, I mean, I totally get it. I just wanted to give you credit for predicting it. All right, the next one is you predicted that the 50 largest oil-importing countries would look at 2026 and say, we need alternatives. Earlier this week, NPR ran a story about how the Pakistani solar boom is helping them weather the crisis better than anyone expected. Bloomberg is calling this the first oil crisis where clean alternatives are fully price-competitive. Is that acceleration real?
James Gutman: Where do I begin? So I think one of the things we talked about is behavior changing. And I think it's obviously only a couple weeks in, so it's too soon to see these massive shifts. But I think you are seeing governments respond in the first order with what you'd expect them to do. So you have the SPR releases. That's not really a surprise. You also have people implementing export controls — in China, in Brazil. I wouldn't be surprised if at some point, and I have no indication that this is being discussed, but it wouldn't surprise me if at some point we get export controls out of the U.S.
I think the thing that's concerning is that you're starting to see a little bit of that happening around the world where other people are saying, my refined products — not yours. Which is sort of a flashing red light. I think something else though that we've talked about is what the longer-term implications are for countries' behavior. And this is where I think it gets really, really important. And you're starting to see movement at the verbal level or the signaling level. And I think this is going to follow through on the policy level.
When Trump first came out and said that he wanted other countries to start escorting traffic through the Straits, helping the U.S. to solve this problem, he listed — what was it — the UK, France, Korea, Japan, and China. So he has already created this bucket of countries that have shared interests and are sort of aligned in what they need to do. He sort of pushed America's allies into a relationship with a country that, in theory, they're not aligned with. And I think that is something that we need to look for over the course of the coming months and years — European countries, America's partners in Asia and throughout the world, in the Gulf as well, saying: China, we may not like certain political values that you hold, or we may not like these aspects of your economic policies, but we have more in common with you now, and we're willing to cooperate or negotiate or coordinate.
Jigar Shah: Well, that was the crazy thing I saw — I mean, you're using words like allies and partners as if Trump has treated anyone like an ally or a partner over the last 12 months. And now we're going to them hat in hand and saying, it'd be so great for you to help us, even though last time this was attempted, one third of all the ships were sunk. But this time around, don't worry, it'll be different. We would love your help to open up the Straits of Hormuz. I mean, color me skeptical. I don't see a lot of folks taking them up on this.
James Gutman: Well, I think the reaction from Europe has been pretty clear. They've said no.
Jigar Shah: Yeah, I think China actually just spit out their tea laughing.
James Gutman: Yeah, but I think China doesn't have to. Something that we talked about before is that Iran is okay giving China access.
Jigar Shah: Yeah, China's already getting their stuff out. Their imports are so small as a percentage of their total energy use. They've got their overland natural gas route from Russia. I mean, they're in pretty decent shape. They've been stockpiling oil the last year.
James Gutman: They haven't been stockpiling natural gas. So they don't have the natural gas reserves that you would hope for. And I think on natural gas, this is an area where they could be a little bit more vulnerable. But I think they're prepared for this, actually.
So I think that's — I just want to go back to where the question started — how is behavior changing? One is, I think we're reshaping the alliances, we're sort of reshuffling the deck with who's in whose camp. And I don't think we're creating any new long-term, I love you forever brother kind of relationships. I think it's very much: in this particular context, I've got more in common with you than I don't. Let's work together.
The other one that I think is very clear is that you have got to stand on the accelerator for your localized energy. And I know this is something that we've talked about many times.
What's the Worst Outcome for Renewables?
James Gutman: Think about it like this. What's the worst possible outcome for the renewables path, the renewables transition? The worst possible outcome is blackouts. As soon as we get to a point where we actually can't keep the lights on, then the backlash becomes vicious and people do what people do. They're like, give me power, whatever it costs, wherever it comes from, I want my lights back on.
Where did Germany go when they had the power crisis because the natural gas from Russia was curtailed? They went to the lignite coal. They just went down and dirty. So get in front of that. Focus on building out your renewable stack. Stand on the accelerator. Get it there. But make sure that if you're balancing the grid, you're balancing the grid with local molecules. And make sure that if you're feeding a petrochemical industry, which we can't do without the barrel at this point, do it with your local barrels. And if you're flying jets, which we can't do on batteries — we're not there yet, or hydrogen or SAF — make sure it's local. And throw money at solutions to solve those problems, which are solvable.
Focus on keeping the system functional so that everybody is like, yeah, okay, this whole transition thing is working.
Follow the Money
Jigar Shah: Okay, last setup question. Who's up and who's down? Tanker companies are up 60%, airlines are getting crushed — United Airlines dropped 33% in a single day. The solar and clean energy index is way up. You spend your days talking to investors and traders. What does the money tell us about where the world thinks this is going?
James Gutman: So I think the world is complacent, to be quite honest at the moment. The trades are talking about the obvious ones. I want to point out that Donald Trump has been extremely good for the renewables space on a financial returns basis. He's been fantastic. Yeah, I know, I know, I know.
Jigar Shah: Oh, like in the first term, we were up like 200%. It was fantastic.
Jamie Nolan: Despite his best efforts, let's say that.
James Gutman: I mean, ironically or not, yeah, he is in fact the environmental president. As much as I think he'd hate to hear that.
Jamie Nolan: I shudder. Don't do this to me.
Jigar Shah: I feel like what you mean to say is he's the degrowth president. Scott Bessent on TV is like, I would like consumers to stop consuming as much. We'd like to tariff the things that they consume, but not inputs into our oil and gas industry or semiconductor industry.
James Gutman: Yeah. But just look at the results. I don't think Donald Trump has any desire to place himself in Camp Green. But the outcome of his actions is everybody scrambling to say, I need more solar. I need more battery. And if it comes from China, hey, I'm okay with that.
Jamie Nolan: Sure, but we're doing that not because of him, but in spite of him, to be fair. Imagine what our growth would look like if he weren't fighting us tooth and nail every step of the way.
James Gutman: Hey, I agree. I agree with you. But the fact is, first there's Donald, then there's green. There's a causal relationship here. He doesn't intend it, but he gets there.
Is This 1973?
Jigar Shah: All right, let's get into the next conversation. So Jason Bordoff, who runs the Columbia Center on Energy, basically has said that what really made the world use oil more efficiently was the 1973 oil embargo and all of the 10 years after that, not the 10 years after the Paris Agreement. It does feel like we're entering the 1973 oil embargo again, now that the Straits of Hormuz seem closed for the foreseeable future. And we might even need ground troops to be able to open it back up, which would be an unmitigated disaster. Explain to me whether you think we're back — is this 1973-level disruption?
James Gutman: So I think the outcomes are going to be very, very reminiscent of 1973, but maybe not necessarily in the same way for the United States. In 1973, the oil was disrupted. The U.S. was the big loser. And so there were two policies that came out of it. The first was Nixon, who was the environmental president, because he ended up pushing for Project Independence — pushed on nuclear and pushed on renewables in order to reduce America's dependency. The second big policy shift was Carter, who was the multilateralist, the peace lover, but the Carter Doctrine said that we were going to protect the flow of oil from the Gulf to the rest of the world. And then it was the Reagan Corollary which said that extends to protecting Saudi Arabia. So that was the impact of the oil shock on U.S. policy.
Now look at the impact of the Hormuz shock on everybody else's foreign policy. In the case of China, it means that they are now more deeply involved in what's going to go on with the Gulf states and with the flow of crude oil. They're being pulled more into helping to manage the global trading system. So they're sort of stepping up — I wouldn't say the next hegemon, but they're getting close.
The European countries are finding themselves in this position where they have to change their economic policies dramatically in order to respond. In the same way as Nixon's Project Independence was really motivated by the fear generated by an oil shock, I think the Europeans are feeling this oil shock and are saying, oh my God, here we go again. I need to have a change.
I think something we talked about before was that there's going to be a spike in prices. When we were last speaking, oil had not yet spiked, but it then subsequently went up and briefly touched $120. But the longer-term implications are going to be the things that people talk about 10 years later. And I think the longer-term implications here — very much like what we saw in the 1970s — are a reshuffling of the global alliances, and that's happening in real time at speed. A real push for localization, diversification, and redundancy. And structurally higher oil and gas prices.
We are going to see, for the foreseeable future, higher insurance rates, because now we know that tankers are fair game. We're going to see more storage — people are going to put more refined product into storage just in case. Instead of 10 days, it's going to be 90 days. We're going to see longer supply chains, more oil on the water, more gas on the water, as people have to avoid these places. And we're going to see redundancy in capacity.
So this is going to mean structurally higher energy prices, certainly for oil and gas. And then that's going to have that knock-on effect for renewables. It's going to make renewables look better by comparison.
China's Clean Energy Marshall Plan
Jigar Shah: Well, the other thing that Michael Cembalest said in the Eye on the Market from JP Morgan was that the amount of trade finance that China is providing the 50 emerging markets around the world today — in terms of solar, wind, battery storage, EVs — is larger than the U.S. Marshall Plan.
James Gutman: As a percentage of...
Jigar Shah: In absolute dollars, inflation-adjusted. It's like $250 billion or so of aid that they're providing. It's not aid in the sense of grants — it's aid in the sense of loose credit for countries that probably couldn't get it. But that's how Pakistan shifted 10% of its entire grid in two years.
James Gutman: Yeah, I mean, let's bear in mind that the Marshall Plan wasn't a gift. It was: I will give you credit so you can buy stuff from America. Very similar.
Jigar Shah: Well, sure, and they're doing the same thing. You can buy stuff from China.
James Gutman: Right. But go back to what we were saying about knitting together alliances. China isn't walking up to everybody in the world and saying, hey, let's sign a contract to be new best friends. China is saying, you know what, I got this thing, you need this thing, how about I help you out? And we can hang out at the coffee shop and chat more. And I think people are like, yeah, okay, I'll chat with you more. You're not as scary as I used to think you were. I think that's the outcome.
Clean Alternatives Are Price-Competitive
Jamie Nolan: Okay, here's what I'm hearing you say, James. Isaac Levi at the Centre for Research on Energy and Clean Air called this the first oil and gas crisis in which clean alternatives are fully price-competitive. And he said that looking at the solar booms, we should expect this to boost deployment in a major way and that that might be significant and durable this time. So is that how you see it, or do you think analysts are kind of getting ahead of themselves in this moment?
James Gutman: I don't think they're getting ahead of themselves. I think before we got stuck into this conflict in Iran, renewables were looking cost-competitive and attractive with the right conditions — so always have that caveat. You have to have the storage, you have to have the grid, et cetera and so forth. But it starts to make a lot of sense. Now it makes more sense, because oil price is higher, gas price is higher — wind and solar just look that much better.
I think the other thing that we need to focus on is that renewables are very, very good at replacing joules on the grid, but that's as far as they can go at this point. On an energy-contained basis, they just look pretty good compared to — or increasingly get better compared to — fossil fuels. The harder parts are the ones that remain. It's where you really need that molecule, either because it's stored energy that you can really move around and store in a way that's very useful, or it can become a specialty chemical or a plastic. Those are going to take a lot longer for us to squeeze out of the system. But right now, from a clean energy perspective, yeah — this just makes renewables look better. More cost-effective, more reliable.
Jigar Shah: Yeah, if you look at China — China is about 10% more electrified than the United States. They're about 35% of their total energy use is electricity. The United States is like 25%. So it feels like the U.S. could get to 35%, all the other countries could do the same. But I'm curious — you said oil hit $120 a barrel. It sort of retrenched a little bit. What would you have to believe for oil to hit $200?
James Gutman: If this curtailment of flow goes on for very much longer and in a meaningful way, $200 is going to look easy.
Jigar Shah: Meaning weeks or months?
James Gutman: You are going to start exhausting the excess inventory above ground in strategic stocks and in commercial stocks that is incremental to what you need just to keep the basic system flowing. If you're running at 10 million barrels a day lost for the next eight weeks or so, you're going to start hitting tank bottoms.
And at that point, you have to start destroying demand. And destroying demand gets really, really ugly. You have to take the price up so that somebody stops consuming it. The people who will stop consuming it are not going to be the Europeans or the Americans or the Japanese and Koreans. It's going to be people in Africa or Latin America or South Asia where they simply don't have the resources to pay for it. The Europeans will bid away LNG carriers and pick them up.
Energy Has Been Weaponized
James Gutman: I think one of the things that I'm not seeing yet, or maybe I'm starting to see, but I want to see more of — we have to recognize that energy has been weaponized. Regardless of how you want to score the events, the flow of gas and oil through the Straits of Hormuz has been used in the context of a war as a way to punish your adversaries. And the people who are feeling this pain are Europeans amongst others.
What I need to see from the Europeans is a recognition that we need to look at our energy infrastructure in the same way we would any other vital national security infrastructure. When we think about defense, one would hope we don't skimp on the resources that we provide in order to maintain our security and sovereignty. When we look at energy infrastructure, we need to take that same attitude.
I think policymakers in Brussels, heads of state throughout the European Union, need to apply that same focus and that same urgency to questions about aligning the grid infrastructure or developing a coherent strategy for rolling out localized energy — which is almost entirely renewables — for restarting nuclear where you can do it. But to do that with a sense of urgency, as if your sovereignty depends on it, because I think the weaponization of energy is telling you that your sovereignty depends on it.
Jigar Shah: Conversations at CERA Week are going to be fascinating.
The Coal Debate
Jamie Nolan: Jigar, you said something on Open Circuit this week that really seemed to get a lot of people's attention — no surprise. You said you have no problem with countries building more coal plants because they're going to build them and not burn them. Solar and storage are just cheaper. India and China burned 3% less coal last year, even after building 60 gigawatts of new coal plants. Your line was: we shouldn't be fearful of coal plant construction. We should be fearful of coal plant burning. James, what's your reaction to that? Do you think the LNG step is just getting skipped entirely?
James Gutman: My reaction was I loved it when I heard it. I was listening to Jigar on the podcast and I thought it was just brilliant. And the thing that I really liked about it was that it was really putting the focus on the utility that coal provides. The price per unit of energy — I mean, I like renewables, except when I can't get them. That's when I really want the coal. At that moment, fine, no problem. Turn it on, that's the price. But when I don't need that, because I've got a better something out there — the wind blowing or the sun shining and the grid working — then it just sits there. And the beauty of coal is it does just sit there.
Before the whole set of events in the Straits of Hormuz, I would have been sort of arguing against Jigar on the coal side and on behalf of natural gas, because natural gas does other stuff. And you can kind of get to a less environmentally damaging place with emissions from natural gas. Going back to the start of the conversation, I didn't really think we were going to push ourselves into a situation where somebody actually closes the Strait. Which is just unheard of. Unthinkable. It's crazy.
Jigar Shah: It's crazy town. It's what you get taught in basic national security 101. There are no good options to reopening the Straits of Hormuz. Do not take steps to close it.
James Gutman: Don't do this. Right, exactly. Step away from the car, sir. There's nothing good about this. But we did it.
The American Consumer
Jigar Shah: Oh my goodness. But I really think Trump thinks that this is his legacy in some way. This is the thing that's so crazy for me — Trump is the person who was like, I'm going to cut your energy bills in half. I've bullied the oil companies to open up the spigot such that oil prices are down, and I'm saving you a bunch of money on gasoline. His legacy, which is what he's pursuing with all this foreign war stuff, is now that Americans are poorer. Americans can't afford a plane ticket because one third of the cost of your airline ticket is jet fuel. They can't afford to fill up their car every week because it's an extra 20 bucks now every single week. Electricity costs are up 13% since he got into office. Execution is not his strong suit.
James Gutman: Yeah, I mean, I just want to go back to the conversation that we were having before. Trump inadvertently has made himself into the guy who's going to spread the environmental transition around the world. I don't think he intended to. And clearly his intent wasn't to make Americans net poorer. But that may actually kind of be what happens.
I think one of the things I struggle with here, Jigar, is we're sitting here and we're trying to ascribe an intent. I didn't expect the Straits to be closed because the sequence of events was so obvious that you keep saying it's bonkers. It is bonkers.
Jigar Shah: You thought people with half a brain cell actually worked there and that they wouldn't have intentionally launched this conflict without a plan. And then you're like, wait, what? There really wasn't a plan?
Jamie Nolan: Or goals. Don't forget that. We don't know what the goals are.
James Gutman: Right. I think they took a gamble. The gamble didn't pan out. I don't know that I would have taken that gamble, but when it didn't pan out, that was the time to cut the loss. That was when you should have left.
Jigar Shah: Yeah, their best chance to have declared victory was before Khamenei's son was put in as supreme leader. And now that he's been put in, and they narrowly missed killing him the other day, Trump can't declare victory and leave. Because if the Straits of Hormuz are closed and he declares victory and leaves, then people will be like, what the hell? The Straits of Hormuz are still closed. So the only way for him to declare victory is if the Straits are open — and that is controlled by Iran, not by the United States of America.
James Gutman: So the Straits aren't fully closed. It's not a binary on or off. I understand, but it's one million barrels a day and it's probably going to increase. It's just going to increase at Iran's discretion. And so I think they're in a position of more power than they were in before.
Jigar Shah: You're saying they're making a lot of friends? Wow, that's a hot take.
Jamie Nolan: So you could say that so far the U.S. mission has failed thus far.
Jigar Shah: All I'm saying is all I hear all day is how much winning we have — so much winning. And you're basically saying that Iran is making more friends than Mark Zuckerberg ever could.
James Gutman: So, you say friends as if people like you. I have yet to find anybody who's said, wow, I'm really bemoaning the Iranian regime itself. I see a lot of people who are deeply, profoundly troubled for what's happening to the Iranian people and for the consequences of the choices that the Iranian regime is taking. But nobody really — I don't know anybody who likes the regime. So nobody's going to be their friend. But they have the ability to do things now that they didn't before.
An Iran with Nothing Left to Lose
James Gutman: They were always holding back from the nuclear option on the Straits because they were afraid of getting pummeled by the United States. Now they've been pummeled. That's out. That's been done. We've blown a whole bunch of stuff up. We've killed a lot of leaders and their family members. What's left do they have to lose? So they push the button, they close the Straits.
Which, by the way — they haven't actually blown up a lot of ships. They've just closed the Straits by threatening, blowing up a few and threatening to blow up a lot of ships. Something that's really important here is that in a brilliant way, they've used the Western financial system against the West. I tell you, hey, there's a pretty good chance that insured vessel is not going to transit. And Lloyd's says, you're right, it's not going to transit. The U.S. offers, well, maybe we'll write the check and insure that vessel. And then somebody sits down and thinks, well, hold on — we've just made it more attractive for the Iranians to then blow up that vessel. Because then not only do they curtail the flow and scare people off, but they make sure that the U.S. has to write a check to compensate.
So what they've done is they've weaponized our own financial system against us in a pretty effective way. The end result here is that an Iran which is no longer afraid of being bombed is an Iran which now has agency and capacity to do things which it would have restrained itself from doing in the past. If you want them to stop at this point, you can't say, or else I'll bomb you. We've already done it.
Is There a Reason for Optimism?
Jigar Shah: Well, look, the last time you came on the pod, James, you told us that nobody calls you when they want to feel better about the future. And so, I don't know what you're going to say to this last question, but I'll ask it anyway. Is there a reason for optimism?
James Gutman: Absolutely. I am an optimist. Let's clarify this. I go through every possible permutation of the downside scenarios and ruminate on them to the point where I have no friends left. And then I go ahead and do it anyways. So what is optimism except for that?
So you want to know what good comes out of this. The good that comes out of this is that all of these countries which allowed themselves to be dependent and in some ways submissive to the U.S. are not going to let themselves be dependent.
We will invest in a localized energy system with renewables and nuclear at the core because that keeps us safe, that provides us with cheap, abundant power, and we can do it on our own. We will talk to other countries around the world as if they deserve respect, and we'll treat them as equals. We will negotiate, we will give, we will take, and we will work it out. And we won't look for the U.S. to underpin and guarantee and chastise or punish and reward people who play according to the rules or who don't. We're going to start exercising a little bit of independent action and grow up.
Jamie Nolan: So you're saying that Iran is going to be the thing that solidifies Trump as the wind and solar president.
James Gutman: You really love that one, don't you? I mean, I think one of the things that has to happen is we have got to accelerate on renewables. I just don't see how you can avoid it in Europe. And everybody I talk to is just like, yeah, you're right. I do also think that we want to be careful in giving him credit as opposed to acknowledging his role as the midwife.
Jamie Nolan: Couldn't agree more.
Electric Vehicles and the Tipping Point
Jigar Shah: Well, and I think the thing that we didn't talk about, but I do think is even more important to get accelerated, is going to be electric vehicles. I think you're just going to see such a huge acceleration of the deployment of electric vehicles into these 50 oil-importing nations, because why would you keep yourself dependent upon importing gasoline and diesel?
James Gutman: Yeah. So the beauty of electric vehicles is — gasoline does something really super useful. It is portable, stored energy. It's great. Now, if I have an EV and I have a grid that can support it, then I can start to take away the utility of that gasoline. And I want to do that if I feel like that gasoline can be curtailed.
War after war after war is started and fought over resources. So when I think about what's going on in the Straits of Hormuz and I ask myself, am I comfortable having that dependency? No. Where's my oil consumption largest? Transportation fuels. How do I get that out of the system on a high-volume basis? I electrify my vehicle fleet. I expand my charging network infrastructure. I increase the support for EVs on the road. And that reduces my dependence.
The beauty of it is that you can reach this tipping point where you no longer actually have to do that much in order to just let nature take its course and people naturally move to an EV charging network. So think about it like this: we talk about range anxiety with electric vehicles, and sure, you can solve range anxiety with batteries, with a charging network, all these wonderful things. But it's not like we don't have range anxiety with ICE vehicles. If I'm living in Texas or Wyoming, I need to know that there's a gas station where I can refuel my vehicle.
As EVs start to extend throughout the system, there are fewer vehicles going onto the petrol station forecourts. There are fewer people paying for the soda pop and the candy bars and filling up their tanks. So the economics behind the gasoline refueling infrastructure start to deteriorate. And those are expensive — it's messy having a petrol station and paying to make sure that you're not leaking into the housing estate next door. So once you get to a certain level of EV penetration, you kind of just don't need to do anything anymore because the utility of having an ICE vehicle starts to go down. I start wondering how I can get to Scotland without having to hunt around for a place to refill my ICE engine.
Outro
Jigar Shah: Well, always a pleasure, James. I hope this is the last time we'll have you on. But I unfortunately don't think that's going to be the case. I feel like your expertise is going to become more and more important in the coming months.
James Gutman: Well, Jigar and Jamie, I always have great pleasure in talking to you, so I hope I do have another chance to come on. I just need to find really cheerful things to say.
Jigar Shah: I want to thank James Gutman for coming on with I think 24 hours' notice. He is a rock star and I always learn so much from him. So thank you, James, for coming on board. Thank you, Simon, for getting all of the notes and everything else together in such record time. And thanks everyone for listening. Really important to have your support. Give us a review and a rating — it really does help people find the podcast. And visit us on YouTube if you're so inclined. Anyway, thank you so much and thank you to our sponsors. Really important to have your support. Thanks, S2G.