April 7, 2026
S4E6: The New Logic of Clean Resilience
In this episode of Sustainability Forward, Wrishi and Carmine explore the new logic of clean resilience.
Against the backdrop of the current Middle East crisis, they examine why the implications go far beyond oil prices. The conversation looks at three connected themes: how renewables are coming into sharper focus as an energy security lever, why water resilience and desalination can no longer be separated from power-system design, and how disruptions to critical commodities such as fertiliser and helium reveal the fragility of global supply chains.
Rather than treating clean energy as only a climate solution, this episode asks a bigger question: are we entering a period in which clean energy, clean water and diversified supply systems become essential pillars of resilience?
A timely discussion on energy, infrastructure, security and what the future may demand from more resilient systems.
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This is.
Sustainability forward with
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Rishi.
And Carmini.
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Hello and welcome to
Sustainability Forward.
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I am your host Rishi and my Co
host Carmini is with me.
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How are you Carmini?
Good Rishi, how is going it's?
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Going very well Carmini.
Today's episode is about the
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ongoing war in the in the Middle
East, but because there has been
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a lot of commentary already
about the geopolitical situation
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there, we are taking a slightly
different take on it.
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What we want to do is ask a more
specific question, which is
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around what does this war reveal
about the systems that keep
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modern life running?
And more importantly, what does
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it mean for clean energy, water
and a whole set of overlooked
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but critical commodities going
around the world?
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So looks like a very interesting
topic.
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So we're trying to go beyond
hydrocarbons, the oil and gas,
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because this conflict has
exposed how much vulnerable the
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entire economies are, not just
on these resources, but the only
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infrastructure and supply chain
that is built around them.
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Yeah.
The war began approximately a
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month ago and already it has
been described as the largest
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disruption to the global oil
market history.
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The the numbers are staggering,
2530% of global oil, 20% of LNG
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that normally moves to the
Strait of Hormuz.
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And also the IEA has taken a
very, very unprecedented step of
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releasing or planning to release
400 million barrels of emergency
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stock, which is which is quite
unprecedented in, in histories.
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There is a reason why we see the
oil headlines, but that's that's
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just for some context around
this problem.
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This is tells that is not just
resource driven story, it's a
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resilience story.
It's about whether countries can
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keep home powered, water
flowing, fertilizer moving,
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semiconductor plants operating
and the food systems functioning
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when a single region become
unstable.
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Yes.
And today we are going to look
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at this through three lenses, so
we get a holistic view on it.
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First is obvious energy and why
renewables are increasingly
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being seen not just as tools to
address climate change, but as
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tools for energy security.
Second, we will look at water,
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especially the relationship
between desalina tion,
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electricity and resilience in
one of the driest parts of the
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world, which is the Middle East.
And 3rd, everything beyond oil
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and really one of the biggest
chunks of of this challenge, It
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includes commodities like
fertilizer, helium, and the less
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visible materials that become
strategic when when a conflict
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like this disrupts the system.
This Third Point really matters
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because there is the danger in
this conversation that we reduce
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what's happening in the Middle
East just to a resource map.
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Yeah, but modern and modern
economies to run much more than
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the oil and gas and the water is
showing us how deep these
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Internet defenses.
Are yeah.
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So let's let's start with the
obvious one, the first one,
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which is energy.
I think the clearest insight
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from this war is that renewables
are gaining a new kind of
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political relevance, not just
because they cut carbon, which
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is really obvious, but because
they reduce exposure to
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geopolitical fuel shocks.
So, and this is a very different
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framing for years in the energy
dilemma, the renewables are
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often often been focusing on one
of the three topic on the
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emission reduction came a target
air pollution and these are
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still valid argument valid
goals, but this conflict is
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doing what he's doing is
elevating much a much harder age
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argument security.
Yeah, the the Sarah week
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concluded in Houston just a few
days ago, and a number of energy
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executives and policy makers are
now openly saying that this
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conflict could accelerate
investment in renewables, not
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because of climate anxiety, but
because of security concerns.
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There was a blunt comment around
wind plus solar plus batteries
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becoming not only economically
viable, but becoming a major
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energy security option.
And this is saying as something
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important, what people value is
not just low cost, it's
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reliability, domestic control
and insulation from global
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volatility.
So security.
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Yes, I heard about the example
of South Korea.
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Reuters mentions that South
Korea sources about 70% of its
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oil from the Middle East. 26 of
these vessels destined for South
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Korea were stuck in the Persian
Gulf and is now and the country
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is now putting in place some
emergency fiscal measures to
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cushion the impact of of this
shock.
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The president of South Korea
framed, you know, this crisis as
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a reason to move towards some
more sustainable energy system
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with a strong emphasis on on.
Renewables and that is a story
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of 1 country, but it reflects
something broader.
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So if you are a resource
importing nation, this war is
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basically an object lesson in
vulnerability.
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The more your economy depends on
third parties and it goes across
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a narrow of contested shipping
route, the more exposed you are.
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Yeah, and this is not only the
story of East Asia.
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Closer to home, here in Europe,
as prices have jumped up more
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than 70% since the war started,
energy ministers in the EU are
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now coordinating their response
and and focusing on filling gas
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storage systems early,
stabilizing product markets and
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trying to avoid fragmented
national reactions.
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At this bring us also to a very
interesting contrast.
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If your system relies heavily on
imported resources, on
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commodities and you are risk of
shortages.
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It's one kind of story.
If your system relies more on on
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solar wind, on manufacturing
things related to
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electrification for example, you
are still not immune, but your
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exposure is very different.
Correct.
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Renewables do not make
geopolitics disappear.
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We know that much.
But they do change what you are
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dependent on.
Once a solar farm or wind
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project is built, it's marginal
fuel cost is basically zero.
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It is not repriced every time a
tanker route is threatened as it
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is happening right now with oil
and LNG.
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So this volatility looks quite
serious.
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So Reuters City Barclays said
that a prolonged disruption
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could imply a supply loss from
13 to 14,000,000 barrels per day
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versus the total global demand
of around 100 million barrels
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per day this year.
This is quite big.
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Barclays also called this the
biggest geopolitical shock to
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energy market since the 1990
Gulf War.
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So the key question is, if you
are a policy maker or a utility
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or an industrial buyer, what do
you take from that?
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You take away the idea that
clean power is not just green
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power, it is partially de risk
power.
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And This is why I think this
work will have a lasting effect
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on the energy politics and the
policies, because the energy
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security broaders, the
coalition, for example, on clean
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energy, you don't need to look
at it just from 1 angle from the
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climate ideology.
You just need to agree that
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repeated shocks are economically
and strategically painful and
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how to manage that.
Yeah, I also think psychology
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matters a lot here.
We've now had two major energy
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system shocks in 2022 with the
Russia Ukraine conflict and now
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this in this one with Iran.
At some point people stop seeing
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these as isolated incidents and
and start seeing them as
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structural features of the
system.
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So the focus goes to how much
geopolitical risk are we willing
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to carry in the current system?
Yeah, Now we we have to be
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honest here.
There is a built in sort of
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inherent short term
contradiction.
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In the immediate aftermath of a
crisis like this, some countries
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fall back on coal or other high
emission fuels because they're
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scrambling for whatever is
available to keep them going.
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And that's important to
acknowledge, because otherwise
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the conversation becomes too
neat.
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In the short run, conflict can
absolutely make the energy mix
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dirtier.
But the long run lesson can
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still be in support of clean
energy.
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In fact, the short run pain may
reinforce it.
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If imported fuels become
expensive, scarce or politically
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risky, then over time the value
of domestic renewable
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electrified systems tends to
rise.
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This is where the energy
security and the climate
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strategy start to converge, not
perfectly, not instantly, but
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increasingly.
Yeah.
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So if we kind of summarize this
first segment on energy in one
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line, it would be this.
The current Middle East war is
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helping turn renewables from a
climate preference into a
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strategic necessity.
It is a very different level of
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importance in the broader way of
telling the story about energy
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transition.
That's right.
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So shall we move to water?
Yes.
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So because this is the part of
the story that I think many
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listeners may not have thought
through that much, that's why
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we're going to spend some time
talking about the threat that is
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linked to water as a result of
this war.
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Yeah, because this crisis are
made something very visible in
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much of the Gulf.
Water security depends on
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electricity security and both
can be threatened at the same
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time.
Yeah.
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AP reported this week that there
were a number of threats
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explicitly linked to bombing of
desalina tion plans and an
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analyst warning that there could
be retaliation from the other
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side, you know, doing the same
to desalina tion plans of other
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countries.
That may sound like an obscure
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infrastructure.
After all, what is a desalina
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tion plant?
But it is not.
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In several Gulf countries,
Desalina tion is the backbone of
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daily life.
Yeah.
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Looking at the same report you
mentioned, we see that for
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example, 90% of drinking water
in Kuwait comes from desalina
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tion, 86% in a man, 70% in Saudi
Arabia.
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And other analysis showing us
that more than 80% of coal
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desalina tion water comes from
just 56 plants, each of them
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highly vulnerable in terms of
security.
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Yeah, let's just let that sink
in.
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More than 90% of the Gulf's
desalinated water coming from
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just 56 plants.
That is an extraordinary
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concentration of risk.
And there is some other crucial
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point.
Many of these desalina tion
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plants are tied to power
station.
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So I just said to energy, to
electricity.
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It's a power water Nexus story.
If electricity goes down, water
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can be disrupted.
If coastal infrastructure is
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damaged, you can simultaneous
stress across both systems.
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Yeah, and there is historical
precedent for it as well.
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During the Iraq, Iraq's 199091
invasion of Kuwait, power
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stations and desalina tion
plants were sabotaged, and
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Kuwait was left largely without
freshwater, relying on emergency
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imports.
And the full recovery from that
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took years.
And that is not hypothetical
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history.
It is a real example of how
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conflict can turn, you know,
infrastructure vulnerability
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into a humanitarian crisis.
So where the clean energy angle
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then coming in the story?
Yeah, it comes from the question
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of decoupling.
If water supply is too dependent
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on centralized fossil heavy
fragile power systems, then one
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response is to redesign the
relationship in electricity.
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More efficient desalina tion,
more distributed power, more
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storage and more backup provides
more resilience.
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And the region is already under
pressure, even without this
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crising.
So the International Energy
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Agency reported last year that
the electricity demand across
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the Middle East and North Africa
is surging, driven heavily by
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cooling and desalina tion.
He said that around 40% of
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projected increase in
electricity demand over the next
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decade is expected to come from
these two needs alone, air
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conditioning and water desalina
tion.
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It's an it's a very important
statistic, 40% of the increase
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in demand coming from cooling
and desalina tion.
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So when people talk about energy
transition in the region, they
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often jump straight to exports,
hydrogen or big industrial
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strategy.
But actually one of the most
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urgent issues is much more
fundamental.
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Can the region build electricity
systems that are resilient
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enough to support water security
in a hotter, dryer and more
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volatile future?
And this crisis is kind of wake
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up call because it reveals that
the water infrastructure is not
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just a separate, you mean the
Aryan category, a utility is
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deeply embedded in the energy
system design.
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Now it's also true that Desalina
Tion has its own sustainability
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challenges.
It is energy intensive, it can
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be carbon intensive, it creates
brine discharge issues about
227
00:16:10,640 --> 00:16:12,360
which we've talked in previous
episodes.
228
00:16:13,720 --> 00:16:18,800
So it's it's quite clear that
Desalina tion plants are highly
229
00:16:18,800 --> 00:16:22,720
energy intensive and emit large
amounts of carbon while being
230
00:16:22,720 --> 00:16:26,360
vulnerable to extreme weather
and rising sea levels.
231
00:16:26,840 --> 00:16:30,360
So the answer is not simply more
desalina tion, the answer is
232
00:16:30,360 --> 00:16:34,320
better desalina tion, cleaner
desalina tion, and more
233
00:16:34,800 --> 00:16:37,640
resilient desalina tion.
Right.
234
00:16:37,720 --> 00:16:41,040
And more intelligently
integrated systems, reverse
235
00:16:41,040 --> 00:16:45,360
osmosis, renewable power,
desalina, tion, energy storage,
236
00:16:45,440 --> 00:16:48,800
demand management, backup
reservoirs.
237
00:16:49,080 --> 00:16:53,480
These are not just side issues
anymore, they're basic security
238
00:16:53,480 --> 00:16:58,800
related issues.
And this is one of the important
239
00:16:58,800 --> 00:17:01,880
things from this episode, I
think, on how we rethink the
240
00:17:02,440 --> 00:17:06,119
link between the energy, the
superpower generation and the
241
00:17:06,119 --> 00:17:12,200
clean and the water part and our
resilient and the connected the
242
00:17:12,200 --> 00:17:17,640
two systems are.
Yeah, because if electricity
243
00:17:17,640 --> 00:17:21,960
fails, people are uncomfortable.
If water fails, people are
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00:17:22,000 --> 00:17:25,119
essentially in danger.
Yeah, exactly.
245
00:17:27,000 --> 00:17:29,840
And the concentration of risk is
also not trivial.
246
00:17:30,160 --> 00:17:34,240
Smaller states like Bahrain,
Qatar and Kuwait have fewer
247
00:17:34,240 --> 00:17:37,360
backup supplies than some of
their neighbors, even though
248
00:17:37,360 --> 00:17:41,400
countries such as Saudi Arabia
and the UAE have invested more
249
00:17:41,400 --> 00:17:44,720
in pipelines, storage reservoirs
and redundancy.
250
00:17:45,680 --> 00:17:50,640
That you know unevenness matters
during the time of conflict like
251
00:17:50,640 --> 00:17:53,560
this.
It also matters politically
252
00:17:53,840 --> 00:17:56,520
because once water
infrastructure is perceives as
253
00:17:56,520 --> 00:17:59,920
vulnerable, governments have
stronger incentives to support
254
00:17:59,920 --> 00:18:02,080
more resilient form of power
supply.
255
00:18:04,440 --> 00:18:08,720
Yeah, and that, again, is the
theme running through today's
256
00:18:08,720 --> 00:18:12,280
episode.
This conflict may accelerate
257
00:18:12,280 --> 00:18:15,680
parts of the transition less
because government suddenly
258
00:18:15,680 --> 00:18:22,160
become greener and more because
they became aware of fragility.
259
00:18:23,400 --> 00:18:29,640
So pulling down the second
segment in one sentence, this
260
00:18:29,640 --> 00:18:34,120
crisis is posing that in the
Gulf, clean power and clean
261
00:18:34,120 --> 00:18:37,800
water are no long separate
conversation, but very linked
262
00:18:37,800 --> 00:18:39,200
together.
Yeah.
263
00:18:39,360 --> 00:18:43,440
And, and once this is seen, it's
it's hard to Unsee it.
264
00:18:43,840 --> 00:18:48,200
So now, Carmen, let's move to
the third and probably one of
265
00:18:48,200 --> 00:18:51,760
the most important parts of the
story, which is everything
266
00:18:51,760 --> 00:18:56,040
people don't usually think about
when they think about the Middle
267
00:18:56,040 --> 00:19:00,560
East.
Yes, the Eden commodities
268
00:19:00,720 --> 00:19:04,800
because he's worried this crisis
is not only distracting the
269
00:19:04,800 --> 00:19:07,560
research part and other
resources is also affecting
270
00:19:08,320 --> 00:19:12,400
supply chains on fertilizers,
helium and other industrial
271
00:19:12,400 --> 00:19:16,600
inputs that sit much deeper in
our economies.
272
00:19:16,920 --> 00:19:20,800
Yeah, starting with fertilizer.
There's a Reuters report
273
00:19:20,800 --> 00:19:24,600
covering this very closely and
the implications are huge.
274
00:19:26,000 --> 00:19:30,280
It is said that the state of
Hormuz carries some 30% of
275
00:19:30,280 --> 00:19:34,160
globally traded fertilizers.
Another reported that more than
276
00:19:34,160 --> 00:19:39,000
30% of global nitrogen
fertilizer supplies, including
277
00:19:39,000 --> 00:19:42,200
urea and sulphur, passed through
the state of Hormuz.
278
00:19:43,240 --> 00:19:49,440
Bank of America warned that that
the conflict threatens 65 to 75%
279
00:19:49,440 --> 00:19:54,160
of global urea supplies.
I think some sources indicate
280
00:19:54,160 --> 00:19:57,440
that prices are already up by 30
to 40%.
281
00:19:58,600 --> 00:20:02,120
And that immediately takes us
from energy security to food
282
00:20:02,200 --> 00:20:05,200
security, because fertilizer is
not a niche commodity.
283
00:20:06,280 --> 00:20:09,360
Letters and notes that
fertilizers support around half
284
00:20:09,360 --> 00:20:12,920
of the globe food production, so
when that supply chain is
285
00:20:12,920 --> 00:20:16,360
disrupted, the consequences
don't go store, don't stop at
286
00:20:16,360 --> 00:20:18,920
firm input cost.
They are global.
287
00:20:20,240 --> 00:20:23,800
Yeah, and we are already seeing
that pressure.
288
00:20:23,800 --> 00:20:28,200
It is reported that US prices
for some fertilizers were up by
289
00:20:28,200 --> 00:20:32,000
as much as 32%.
Middle Eastern urea prices has
290
00:20:32,000 --> 00:20:37,680
surged by 40% and in Ukraine,
officials were talking about 30
291
00:20:37,680 --> 00:20:44,880
to 35% increases in fertilizer
with urea up 65% since January.
292
00:20:44,880 --> 00:20:47,520
So significant increases all,
all across the board.
293
00:20:49,360 --> 00:20:53,560
Which is why this conflict is
being described as fresh food
294
00:20:53,640 --> 00:20:56,520
price risk for vulnerable
countries.
295
00:20:57,600 --> 00:21:00,760
And it's been reported in many
emerging countries.
296
00:21:01,600 --> 00:21:06,680
In many emerging countries, food
and fuel make from 30 to 50% of
297
00:21:06,680 --> 00:21:10,240
consumer spending.
So these kind of shocks really
298
00:21:10,240 --> 00:21:13,240
matters.
Yeah, and there's also a
299
00:21:13,360 --> 00:21:16,920
structural point here.
Fertilizer is both shipping
300
00:21:16,920 --> 00:21:20,720
dependent and gas dependent.
Nitrogen fertilizer relies
301
00:21:20,720 --> 00:21:22,680
heavily on natural gas as
feedstock.
302
00:21:22,960 --> 00:21:26,560
So when war disrupts a gas
infrastructure and maritime
303
00:21:27,280 --> 00:21:32,120
routes at the same time,
fertilizer gets squeezed twice.
304
00:21:34,040 --> 00:21:37,120
Now this.
Opens up an interesting link to
305
00:21:37,120 --> 00:21:40,160
clean energy because if
countries and companies wants to
306
00:21:40,160 --> 00:21:42,400
reduce the kind of
vulnerability, one part is not
307
00:21:42,400 --> 00:21:46,640
just diversifying the trade
routes but also developing low
308
00:21:46,760 --> 00:21:50,440
lower risk form of ammonia and
fertilizer production, including
309
00:21:50,800 --> 00:21:53,560
routes tied to renewable power
over time.
310
00:21:54,120 --> 00:21:57,160
Exactly.
This is where the conversation
311
00:21:57,160 --> 00:22:03,920
starts to move beyond replace
oil with solar and into how do
312
00:22:03,920 --> 00:22:08,680
we build industrial systems that
are less hostage to fossil fuel
313
00:22:08,960 --> 00:22:14,000
and choke point risk.
So let's bring the alien part,
314
00:22:14,000 --> 00:22:16,640
the alien story now, because
this is one of those commodities
315
00:22:16,640 --> 00:22:20,400
most people never think about
until there is a suddenly a
316
00:22:20,400 --> 00:22:22,040
shortage.
Yeah.
317
00:22:23,640 --> 00:22:27,960
Reuters reported recently that
disruptions to Qatar's gas
318
00:22:27,960 --> 00:22:32,240
processing had driven helium
spot prices to double since the
319
00:22:32,240 --> 00:22:35,760
crisis began.
That matters because helium is
320
00:22:35,800 --> 00:22:38,760
extracted as a by product of
natural gas processing.
321
00:22:38,760 --> 00:22:42,640
So if LNG output output is
disrupted, helium supply is
322
00:22:42,640 --> 00:22:47,000
disrupted too.
And Qatar is not a minor player
323
00:22:47,000 --> 00:22:50,000
here.
Without dipping into the number,
324
00:22:50,000 --> 00:22:54,120
let's think about almost 1/3 of
what supply is coming from
325
00:22:54,120 --> 00:22:56,960
there.
Wow, that's extraordinary
326
00:22:56,960 --> 00:22:59,240
concentration for such a
critical mineral.
327
00:22:59,600 --> 00:23:08,520
And just to tell our tell our
audience at what uses helium MRI
328
00:23:08,520 --> 00:23:12,000
machines, semiconductor
manufacturing, aerospace,
329
00:23:12,000 --> 00:23:15,440
scientific equipment, sectors
that are central to both
330
00:23:15,440 --> 00:23:17,240
healthcare and advanced
industry.
331
00:23:18,040 --> 00:23:21,280
South Korea's chip makers have
enough helium inventory for now,
332
00:23:21,640 --> 00:23:24,880
but they are paying premiums to
secure supply, and the
333
00:23:24,880 --> 00:23:30,080
government sees helium and
bromine as among key materials
334
00:23:30,080 --> 00:23:32,240
at risk if the conflict
persists.
335
00:23:33,640 --> 00:23:38,640
And so even in this study we see
as a conflict is impacting
336
00:23:38,640 --> 00:23:43,000
supply chains checkpoints and
this can suddenly becomes
337
00:23:44,280 --> 00:23:47,800
semiconductor story, a medical
image story and AI
338
00:23:47,800 --> 00:23:51,920
infrastructure story risk.
And if you're listening to this
339
00:23:52,200 --> 00:23:57,160
from the outside or from outside
the energy world, that's the key
340
00:23:57,160 --> 00:24:00,400
message.
Commodity interdependence means
341
00:24:00,400 --> 00:24:03,960
a conflict that begins with
tankers and terminals can end up
342
00:24:03,960 --> 00:24:09,120
affecting farms, hospitals and
chip fabrication facilities.
343
00:24:10,400 --> 00:24:12,360
So we talk about fertilizer and
helium.
344
00:24:14,040 --> 00:24:17,840
There is also discussion about
disruption of Petro chemicals
345
00:24:17,840 --> 00:24:22,160
and plastics because we have
more than 40% for example of
346
00:24:22,160 --> 00:24:27,320
global political and export in
2025 that is coming from the
347
00:24:27,320 --> 00:24:31,840
Middle East and pricing surging
as supplies tighten.
348
00:24:32,440 --> 00:24:38,800
So the wider point is the region
a significant that goes beyond
349
00:24:39,000 --> 00:24:43,960
resources but also industrial,
which is why.
350
00:24:44,200 --> 00:24:48,000
I think the third segment
changes the way we talk about
351
00:24:48,000 --> 00:24:52,680
resilience.
It is not enough to say we need
352
00:24:52,680 --> 00:24:55,880
more energy security.
The more complete statement
353
00:24:55,880 --> 00:25:02,040
should be we need cleaner, more
diversified, less geographically
354
00:25:02,040 --> 00:25:06,080
concentrated supply systems
across energy and industry.
355
00:25:07,000 --> 00:25:10,520
The reason clean energy matters
here is that it can reduce
356
00:25:10,520 --> 00:25:15,280
exposure on multiple levels.
It can lower dependence on
357
00:25:15,320 --> 00:25:18,160
resources, it can support
domestic industrial
358
00:25:18,160 --> 00:25:20,880
electrification.
It can eventually underpin a new
359
00:25:20,880 --> 00:25:23,440
rules for producing inputs like
ammonia.
360
00:25:24,400 --> 00:25:28,280
And it can make economies less
vulnerable to knock out the fat
361
00:25:29,080 --> 00:25:31,280
on these disruptions.
Yeah.
362
00:25:32,000 --> 00:25:36,400
So in that sense, this conflict
is broadening the clean
363
00:25:36,400 --> 00:25:39,640
transition conversation.
It's no longer just about
364
00:25:39,640 --> 00:25:43,760
decarbonizing the grid.
It's about building economies
365
00:25:43,920 --> 00:25:50,120
that are less brittle.
And this will be one of the most
366
00:25:50,120 --> 00:25:53,360
durable legacies about what
we're living today.
367
00:25:54,400 --> 00:25:59,440
OK, now as we are approaching
the end of this episode, let's
368
00:25:59,440 --> 00:26:03,560
step back and connect the dots.
We started with energy, where
369
00:26:03,560 --> 00:26:06,640
the war is sharpening the case
for renewables, storage and
370
00:26:06,640 --> 00:26:09,120
electrification as tools of
national security.
371
00:26:09,920 --> 00:26:14,840
We then move to water where the
conflict is exposing how
372
00:26:14,840 --> 00:26:18,960
vulnerable desalina tion
dependent systems are when power
373
00:26:18,960 --> 00:26:21,280
and water infrastructure are
tightly coupled.
374
00:26:21,920 --> 00:26:25,240
And finally, we looked at other
commodities including
375
00:26:25,240 --> 00:26:29,720
fertilizer, helium and hidden
communities as we call them,
376
00:26:30,080 --> 00:26:34,760
where the conflict driven
disruption is rippling into
377
00:26:34,760 --> 00:26:38,360
agriculture, into healthcare,
semiconductors and even
378
00:26:38,360 --> 00:26:42,560
manufacturing sectors that we
didn't think were getting
379
00:26:42,560 --> 00:26:44,920
disrupted immediately after the
Wharf.
380
00:26:45,960 --> 00:26:50,560
And the common trend is
fragility linked to centralized
381
00:26:50,560 --> 00:26:52,640
systems.
We talk about long supply
382
00:26:52,640 --> 00:26:57,560
chains, checkpoints, dependence
on natural resources, heavy
383
00:26:57,560 --> 00:27:00,200
concentration in few facilities
of countries.
384
00:27:00,320 --> 00:27:06,480
We talk about risk.
Which leads to a bigger idea.
385
00:27:07,120 --> 00:27:10,600
Maybe the transition we are
talking about is not just an
386
00:27:10,600 --> 00:27:13,960
energy transition, maybe it is a
resilience transition.
387
00:27:15,280 --> 00:27:17,600
It's an interesting framing
because it captures something
388
00:27:17,600 --> 00:27:20,120
that climate language sometimes
misses.
389
00:27:21,360 --> 00:27:25,240
For some other things,
resilience is more probably
390
00:27:25,320 --> 00:27:30,520
understandable, easier to
digest, speaks to security,
391
00:27:30,600 --> 00:27:34,640
sovereignty, affordability,
continuity, readiness.
392
00:27:35,920 --> 00:27:41,480
Yeah, and the war in the Middle
East is making that framing hard
393
00:27:41,480 --> 00:27:45,160
to ignore.
The IMF has already warned that
394
00:27:45,160 --> 00:27:49,120
the shock is global, though
asymmetric, and that poorer
395
00:27:49,120 --> 00:27:53,400
countries are especially at risk
from higher food and fertilizer
396
00:27:53,440 --> 00:27:57,880
prices.
The G7 has said it is ready to
397
00:27:57,880 --> 00:28:02,000
take all the necessary measures
for energy and market stability.
398
00:28:02,680 --> 00:28:07,520
The IE again has made it's
largest ever emergency stock
399
00:28:07,640 --> 00:28:13,000
release of of crude oil.
These are not small or marginal
400
00:28:13,000 --> 00:28:16,640
signals, they tell you.
Policy makers see this as
401
00:28:16,640 --> 00:28:21,280
systemic.
And as you also mentioned before
402
00:28:21,280 --> 00:28:22,720
Richie, there are some answers
here.
403
00:28:22,800 --> 00:28:26,760
Doesn't all discussion does not
automatically follow that every
404
00:28:26,760 --> 00:28:30,120
government will respond by
accelerating energy transition.
405
00:28:30,640 --> 00:28:36,760
Some may double down on short
term fossil back up.
406
00:28:38,320 --> 00:28:41,000
That is the dimension of time.
That is the dimension of the
407
00:28:41,000 --> 00:28:46,680
inertia of the energy systems.
That's right.
408
00:28:47,520 --> 00:28:52,360
So the argument is not that the
war neatly and immediately helps
409
00:28:52,360 --> 00:28:54,840
the transition.
That's not what we are saying in
410
00:28:54,840 --> 00:28:58,240
this episode.
The the argument here is that
411
00:28:58,240 --> 00:29:02,680
the war exposes the strategic
weaknesses of the existing
412
00:29:02,680 --> 00:29:07,240
system and in doing so improves
the long term case for clean,
413
00:29:07,600 --> 00:29:10,960
electrified and diversified
alternatives.
414
00:29:13,280 --> 00:29:16,000
Maybe the most important
distinction to this episode,
415
00:29:16,000 --> 00:29:18,920
there are also what we said
before, there are reaction in
416
00:29:18,920 --> 00:29:21,360
short term versus long term
direction.
417
00:29:22,640 --> 00:29:24,960
Short term, the picture can be
messy.
418
00:29:24,960 --> 00:29:29,360
Higher fossil prices.
Temporary coal fall back.
419
00:29:30,040 --> 00:29:33,840
Emergency subsidies, Panic
buying supplies, family.
420
00:29:34,760 --> 00:29:38,640
Any long term, the lesson might
be very clear.
421
00:29:38,640 --> 00:29:44,360
Countries rely on important
other resources, probably less
422
00:29:44,440 --> 00:29:48,280
building stronger grades, link
clean energy to water security,
423
00:29:48,280 --> 00:29:51,440
diversify critical inputs are
likely to better position in a
424
00:29:51,440 --> 00:29:56,080
world where this disruption is
not so rare.
425
00:29:57,040 --> 00:30:01,200
Yeah, and that the world does
not feel theoretical anymore.
426
00:30:02,960 --> 00:30:12,280
So Rishi, let's then wrap up, I
think has been very interesting
427
00:30:12,360 --> 00:30:18,080
episode.
My take away probably first we
428
00:30:18,080 --> 00:30:22,160
see government start now being
more explicit about framing the
429
00:30:22,160 --> 00:30:25,600
energy transition with the
security apart.
430
00:30:26,720 --> 00:30:30,120
It was interesting to look at
the water resilience especially
431
00:30:30,120 --> 00:30:33,120
in the Desalina tion and linked
to clean power.
432
00:30:33,960 --> 00:30:40,040
And 3rd, they had industrial
policy start to take all the
433
00:30:40,040 --> 00:30:44,120
other commodities we discussed
about fertilizer, helium, other
434
00:30:44,120 --> 00:30:47,160
strategic materials more
seriously in the context of
435
00:30:47,360 --> 00:30:48,800
resilience.
Yeah.
436
00:30:49,280 --> 00:30:52,320
And I'd also add one more.
Let's keep an eye on the
437
00:30:52,320 --> 00:30:56,200
language, because language often
tells you when a shift is
438
00:30:56,200 --> 00:30:58,600
happening.
If the conversation moves from
439
00:30:58,720 --> 00:31:03,440
climate ambition to resilience,
security, self-reliance and
440
00:31:03,440 --> 00:31:06,720
critical systems, that may be a
sign that the politics of clean
441
00:31:06,720 --> 00:31:15,520
energy are entering a new phase.
A phase that is probably more
442
00:31:16,400 --> 00:31:19,320
based on facts and hard
experience.
443
00:31:20,040 --> 00:31:25,640
Yeah, and sadly, a global
conflicts often force those
444
00:31:25,640 --> 00:31:30,520
realizations upon us.
Thank you Richie for the great
445
00:31:30,520 --> 00:31:33,960
episode.
Thank you, Carmine, and thanks
446
00:31:34,320 --> 00:31:36,720
to all our audience around the
world for listening to
447
00:31:36,720 --> 00:31:40,040
Sustainability Forward.
If you found this episode
448
00:31:40,040 --> 00:31:44,120
useful, do share it, and as
always, we'd love to hear what
449
00:31:44,120 --> 00:31:44,600
you think.
00:00:03,120 --> 00:00:05,200
This is.
Sustainability forward with
2
00:00:05,240 --> 00:00:06,600
Rishi.
And Carmini.
3
00:00:09,400 --> 00:00:12,200
Hello and welcome to
Sustainability Forward.
4
00:00:12,760 --> 00:00:17,360
I am your host Rishi and my Co
host Carmini is with me.
5
00:00:17,560 --> 00:00:21,440
How are you Carmini?
Good Rishi, how is going it's?
6
00:00:21,440 --> 00:00:26,960
Going very well Carmini.
Today's episode is about the
7
00:00:27,240 --> 00:00:32,320
ongoing war in the in the Middle
East, but because there has been
8
00:00:32,320 --> 00:00:37,200
a lot of commentary already
about the geopolitical situation
9
00:00:37,200 --> 00:00:42,320
there, we are taking a slightly
different take on it.
10
00:00:42,760 --> 00:00:46,480
What we want to do is ask a more
specific question, which is
11
00:00:46,480 --> 00:00:51,320
around what does this war reveal
about the systems that keep
12
00:00:51,440 --> 00:00:56,040
modern life running?
And more importantly, what does
13
00:00:56,040 --> 00:01:02,000
it mean for clean energy, water
and a whole set of overlooked
14
00:01:02,200 --> 00:01:04,959
but critical commodities going
around the world?
15
00:01:06,840 --> 00:01:08,600
So looks like a very interesting
topic.
16
00:01:08,600 --> 00:01:14,960
So we're trying to go beyond
hydrocarbons, the oil and gas,
17
00:01:15,440 --> 00:01:18,920
because this conflict has
exposed how much vulnerable the
18
00:01:18,920 --> 00:01:24,600
entire economies are, not just
on these resources, but the only
19
00:01:24,640 --> 00:01:27,720
infrastructure and supply chain
that is built around them.
20
00:01:27,920 --> 00:01:30,560
Yeah.
The war began approximately a
21
00:01:30,560 --> 00:01:36,600
month ago and already it has
been described as the largest
22
00:01:36,600 --> 00:01:39,720
disruption to the global oil
market history.
23
00:01:41,200 --> 00:01:46,640
The the numbers are staggering,
2530% of global oil, 20% of LNG
24
00:01:47,320 --> 00:01:50,400
that normally moves to the
Strait of Hormuz.
25
00:01:50,680 --> 00:01:54,680
And also the IEA has taken a
very, very unprecedented step of
26
00:01:54,680 --> 00:01:59,520
releasing or planning to release
400 million barrels of emergency
27
00:01:59,880 --> 00:02:04,800
stock, which is which is quite
unprecedented in, in histories.
28
00:02:05,760 --> 00:02:09,039
There is a reason why we see the
oil headlines, but that's that's
29
00:02:09,039 --> 00:02:11,440
just for some context around
this problem.
30
00:02:12,480 --> 00:02:18,240
This is tells that is not just
resource driven story, it's a
31
00:02:18,240 --> 00:02:22,360
resilience story.
It's about whether countries can
32
00:02:22,360 --> 00:02:26,360
keep home powered, water
flowing, fertilizer moving,
33
00:02:26,840 --> 00:02:30,680
semiconductor plants operating
and the food systems functioning
34
00:02:31,280 --> 00:02:33,720
when a single region become
unstable.
35
00:02:35,000 --> 00:02:38,120
Yes.
And today we are going to look
36
00:02:38,120 --> 00:02:42,040
at this through three lenses, so
we get a holistic view on it.
37
00:02:42,560 --> 00:02:47,560
First is obvious energy and why
renewables are increasingly
38
00:02:47,560 --> 00:02:52,280
being seen not just as tools to
address climate change, but as
39
00:02:52,480 --> 00:02:57,280
tools for energy security.
Second, we will look at water,
40
00:02:57,440 --> 00:03:00,520
especially the relationship
between desalina tion,
41
00:03:00,920 --> 00:03:04,600
electricity and resilience in
one of the driest parts of the
42
00:03:04,600 --> 00:03:09,000
world, which is the Middle East.
And 3rd, everything beyond oil
43
00:03:09,040 --> 00:03:14,160
and really one of the biggest
chunks of of this challenge, It
44
00:03:14,160 --> 00:03:18,240
includes commodities like
fertilizer, helium, and the less
45
00:03:18,240 --> 00:03:22,560
visible materials that become
strategic when when a conflict
46
00:03:22,560 --> 00:03:27,520
like this disrupts the system.
This Third Point really matters
47
00:03:27,520 --> 00:03:32,640
because there is the danger in
this conversation that we reduce
48
00:03:32,760 --> 00:03:35,880
what's happening in the Middle
East just to a resource map.
49
00:03:36,120 --> 00:03:42,240
Yeah, but modern and modern
economies to run much more than
50
00:03:42,520 --> 00:03:46,120
the oil and gas and the water is
showing us how deep these
51
00:03:46,720 --> 00:03:50,280
Internet defenses.
Are yeah.
52
00:03:51,200 --> 00:03:54,320
So let's let's start with the
obvious one, the first one,
53
00:03:54,320 --> 00:03:58,800
which is energy.
I think the clearest insight
54
00:03:58,800 --> 00:04:02,720
from this war is that renewables
are gaining a new kind of
55
00:04:02,720 --> 00:04:06,920
political relevance, not just
because they cut carbon, which
56
00:04:06,920 --> 00:04:11,200
is really obvious, but because
they reduce exposure to
57
00:04:11,520 --> 00:04:18,320
geopolitical fuel shocks.
So, and this is a very different
58
00:04:18,320 --> 00:04:24,440
framing for years in the energy
dilemma, the renewables are
59
00:04:24,440 --> 00:04:28,920
often often been focusing on one
of the three topic on the
60
00:04:28,920 --> 00:04:32,520
emission reduction came a target
air pollution and these are
61
00:04:32,520 --> 00:04:37,880
still valid argument valid
goals, but this conflict is
62
00:04:37,960 --> 00:04:43,240
doing what he's doing is
elevating much a much harder age
63
00:04:43,360 --> 00:04:48,800
argument security.
Yeah, the the Sarah week
64
00:04:48,800 --> 00:04:52,560
concluded in Houston just a few
days ago, and a number of energy
65
00:04:52,560 --> 00:04:57,000
executives and policy makers are
now openly saying that this
66
00:04:57,000 --> 00:05:01,400
conflict could accelerate
investment in renewables, not
67
00:05:01,920 --> 00:05:05,880
because of climate anxiety, but
because of security concerns.
68
00:05:06,520 --> 00:05:12,720
There was a blunt comment around
wind plus solar plus batteries
69
00:05:13,160 --> 00:05:17,800
becoming not only economically
viable, but becoming a major
70
00:05:17,800 --> 00:05:22,800
energy security option.
And this is saying as something
71
00:05:22,800 --> 00:05:26,760
important, what people value is
not just low cost, it's
72
00:05:26,960 --> 00:05:30,280
reliability, domestic control
and insulation from global
73
00:05:30,280 --> 00:05:32,040
volatility.
So security.
74
00:05:32,960 --> 00:05:37,080
Yes, I heard about the example
of South Korea.
75
00:05:38,760 --> 00:05:43,240
Reuters mentions that South
Korea sources about 70% of its
76
00:05:43,240 --> 00:05:49,640
oil from the Middle East. 26 of
these vessels destined for South
77
00:05:49,640 --> 00:05:53,920
Korea were stuck in the Persian
Gulf and is now and the country
78
00:05:53,920 --> 00:05:57,160
is now putting in place some
emergency fiscal measures to
79
00:05:57,160 --> 00:06:00,360
cushion the impact of of this
shock.
80
00:06:01,040 --> 00:06:04,680
The president of South Korea
framed, you know, this crisis as
81
00:06:04,680 --> 00:06:08,320
a reason to move towards some
more sustainable energy system
82
00:06:08,720 --> 00:06:13,720
with a strong emphasis on on.
Renewables and that is a story
83
00:06:13,720 --> 00:06:16,240
of 1 country, but it reflects
something broader.
84
00:06:16,240 --> 00:06:21,560
So if you are a resource
importing nation, this war is
85
00:06:21,560 --> 00:06:25,280
basically an object lesson in
vulnerability.
86
00:06:25,880 --> 00:06:30,720
The more your economy depends on
third parties and it goes across
87
00:06:30,720 --> 00:06:34,720
a narrow of contested shipping
route, the more exposed you are.
88
00:06:35,280 --> 00:06:38,440
Yeah, and this is not only the
story of East Asia.
89
00:06:38,840 --> 00:06:43,200
Closer to home, here in Europe,
as prices have jumped up more
90
00:06:43,200 --> 00:06:49,440
than 70% since the war started,
energy ministers in the EU are
91
00:06:49,440 --> 00:06:54,040
now coordinating their response
and and focusing on filling gas
92
00:06:54,040 --> 00:06:58,560
storage systems early,
stabilizing product markets and
93
00:06:58,560 --> 00:07:02,320
trying to avoid fragmented
national reactions.
94
00:07:03,720 --> 00:07:06,320
At this bring us also to a very
interesting contrast.
95
00:07:06,320 --> 00:07:10,480
If your system relies heavily on
imported resources, on
96
00:07:10,480 --> 00:07:14,920
commodities and you are risk of
shortages.
97
00:07:15,880 --> 00:07:19,880
It's one kind of story.
If your system relies more on on
98
00:07:19,880 --> 00:07:25,720
solar wind, on manufacturing
things related to
99
00:07:25,720 --> 00:07:29,200
electrification for example, you
are still not immune, but your
100
00:07:29,200 --> 00:07:32,200
exposure is very different.
Correct.
101
00:07:32,680 --> 00:07:37,200
Renewables do not make
geopolitics disappear.
102
00:07:37,320 --> 00:07:41,320
We know that much.
But they do change what you are
103
00:07:41,320 --> 00:07:44,680
dependent on.
Once a solar farm or wind
104
00:07:44,680 --> 00:07:48,760
project is built, it's marginal
fuel cost is basically zero.
105
00:07:49,480 --> 00:07:54,760
It is not repriced every time a
tanker route is threatened as it
106
00:07:54,760 --> 00:07:57,280
is happening right now with oil
and LNG.
107
00:07:58,960 --> 00:08:03,640
So this volatility looks quite
serious.
108
00:08:03,920 --> 00:08:09,720
So Reuters City Barclays said
that a prolonged disruption
109
00:08:09,720 --> 00:08:14,040
could imply a supply loss from
13 to 14,000,000 barrels per day
110
00:08:14,480 --> 00:08:18,200
versus the total global demand
of around 100 million barrels
111
00:08:18,200 --> 00:08:21,120
per day this year.
This is quite big.
112
00:08:21,960 --> 00:08:25,000
Barclays also called this the
biggest geopolitical shock to
113
00:08:25,000 --> 00:08:28,000
energy market since the 1990
Gulf War.
114
00:08:29,640 --> 00:08:35,200
So the key question is, if you
are a policy maker or a utility
115
00:08:35,960 --> 00:08:39,280
or an industrial buyer, what do
you take from that?
116
00:08:40,240 --> 00:08:44,440
You take away the idea that
clean power is not just green
117
00:08:44,440 --> 00:08:47,680
power, it is partially de risk
power.
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00:08:49,520 --> 00:08:53,120
And This is why I think this
work will have a lasting effect
119
00:08:53,120 --> 00:08:58,720
on the energy politics and the
policies, because the energy
120
00:08:58,720 --> 00:09:02,000
security broaders, the
coalition, for example, on clean
121
00:09:02,000 --> 00:09:07,840
energy, you don't need to look
at it just from 1 angle from the
122
00:09:07,880 --> 00:09:13,320
climate ideology.
You just need to agree that
123
00:09:13,320 --> 00:09:17,480
repeated shocks are economically
and strategically painful and
124
00:09:17,480 --> 00:09:21,240
how to manage that.
Yeah, I also think psychology
125
00:09:21,240 --> 00:09:24,960
matters a lot here.
We've now had two major energy
126
00:09:24,960 --> 00:09:30,640
system shocks in 2022 with the
Russia Ukraine conflict and now
127
00:09:30,640 --> 00:09:36,080
this in this one with Iran.
At some point people stop seeing
128
00:09:36,080 --> 00:09:39,440
these as isolated incidents and
and start seeing them as
129
00:09:39,720 --> 00:09:42,320
structural features of the
system.
130
00:09:43,520 --> 00:09:47,280
So the focus goes to how much
geopolitical risk are we willing
131
00:09:47,280 --> 00:09:52,720
to carry in the current system?
Yeah, Now we we have to be
132
00:09:52,720 --> 00:09:57,040
honest here.
There is a built in sort of
133
00:09:57,040 --> 00:09:59,040
inherent short term
contradiction.
134
00:09:59,600 --> 00:10:03,480
In the immediate aftermath of a
crisis like this, some countries
135
00:10:03,480 --> 00:10:07,360
fall back on coal or other high
emission fuels because they're
136
00:10:07,360 --> 00:10:10,760
scrambling for whatever is
available to keep them going.
137
00:10:11,560 --> 00:10:13,720
And that's important to
acknowledge, because otherwise
138
00:10:13,720 --> 00:10:15,520
the conversation becomes too
neat.
139
00:10:16,320 --> 00:10:19,760
In the short run, conflict can
absolutely make the energy mix
140
00:10:19,960 --> 00:10:24,360
dirtier.
But the long run lesson can
141
00:10:24,360 --> 00:10:27,000
still be in support of clean
energy.
142
00:10:27,280 --> 00:10:30,960
In fact, the short run pain may
reinforce it.
143
00:10:31,480 --> 00:10:35,760
If imported fuels become
expensive, scarce or politically
144
00:10:35,760 --> 00:10:40,280
risky, then over time the value
of domestic renewable
145
00:10:41,760 --> 00:10:44,160
electrified systems tends to
rise.
146
00:10:45,160 --> 00:10:47,200
This is where the energy
security and the climate
147
00:10:47,200 --> 00:10:51,720
strategy start to converge, not
perfectly, not instantly, but
148
00:10:51,760 --> 00:10:53,080
increasingly.
Yeah.
149
00:10:53,280 --> 00:10:57,880
So if we kind of summarize this
first segment on energy in one
150
00:10:57,880 --> 00:11:02,760
line, it would be this.
The current Middle East war is
151
00:11:02,760 --> 00:11:07,520
helping turn renewables from a
climate preference into a
152
00:11:07,520 --> 00:11:12,600
strategic necessity.
It is a very different level of
153
00:11:12,600 --> 00:11:16,240
importance in the broader way of
telling the story about energy
154
00:11:16,240 --> 00:11:18,560
transition.
That's right.
155
00:11:18,880 --> 00:11:22,200
So shall we move to water?
Yes.
156
00:11:23,320 --> 00:11:29,880
So because this is the part of
the story that I think many
157
00:11:29,880 --> 00:11:33,920
listeners may not have thought
through that much, that's why
158
00:11:33,920 --> 00:11:37,320
we're going to spend some time
talking about the threat that is
159
00:11:37,320 --> 00:11:39,600
linked to water as a result of
this war.
160
00:11:40,200 --> 00:11:43,480
Yeah, because this crisis are
made something very visible in
161
00:11:43,480 --> 00:11:46,520
much of the Gulf.
Water security depends on
162
00:11:46,560 --> 00:11:50,440
electricity security and both
can be threatened at the same
163
00:11:50,440 --> 00:11:52,680
time.
Yeah.
164
00:11:54,360 --> 00:11:59,720
AP reported this week that there
were a number of threats
165
00:12:00,320 --> 00:12:07,840
explicitly linked to bombing of
desalina tion plans and an
166
00:12:07,840 --> 00:12:11,120
analyst warning that there could
be retaliation from the other
167
00:12:11,120 --> 00:12:17,440
side, you know, doing the same
to desalina tion plans of other
168
00:12:17,440 --> 00:12:19,840
countries.
That may sound like an obscure
169
00:12:20,040 --> 00:12:23,000
infrastructure.
After all, what is a desalina
170
00:12:23,000 --> 00:12:25,040
tion plant?
But it is not.
171
00:12:25,240 --> 00:12:28,800
In several Gulf countries,
Desalina tion is the backbone of
172
00:12:28,800 --> 00:12:30,600
daily life.
Yeah.
173
00:12:31,080 --> 00:12:34,160
Looking at the same report you
mentioned, we see that for
174
00:12:34,160 --> 00:12:38,000
example, 90% of drinking water
in Kuwait comes from desalina
175
00:12:38,000 --> 00:12:41,760
tion, 86% in a man, 70% in Saudi
Arabia.
176
00:12:43,120 --> 00:12:47,840
And other analysis showing us
that more than 80% of coal
177
00:12:47,920 --> 00:12:52,600
desalina tion water comes from
just 56 plants, each of them
178
00:12:52,600 --> 00:12:56,560
highly vulnerable in terms of
security.
179
00:12:57,640 --> 00:13:00,920
Yeah, let's just let that sink
in.
180
00:13:01,440 --> 00:13:06,600
More than 90% of the Gulf's
desalinated water coming from
181
00:13:06,600 --> 00:13:09,760
just 56 plants.
That is an extraordinary
182
00:13:09,760 --> 00:13:15,640
concentration of risk.
And there is some other crucial
183
00:13:15,640 --> 00:13:17,240
point.
Many of these desalina tion
184
00:13:17,240 --> 00:13:19,200
plants are tied to power
station.
185
00:13:19,280 --> 00:13:21,880
So I just said to energy, to
electricity.
186
00:13:22,800 --> 00:13:28,920
It's a power water Nexus story.
If electricity goes down, water
187
00:13:28,920 --> 00:13:31,920
can be disrupted.
If coastal infrastructure is
188
00:13:31,920 --> 00:13:35,960
damaged, you can simultaneous
stress across both systems.
189
00:13:37,360 --> 00:13:41,360
Yeah, and there is historical
precedent for it as well.
190
00:13:42,120 --> 00:13:49,680
During the Iraq, Iraq's 199091
invasion of Kuwait, power
191
00:13:49,680 --> 00:13:53,000
stations and desalina tion
plants were sabotaged, and
192
00:13:53,000 --> 00:13:56,640
Kuwait was left largely without
freshwater, relying on emergency
193
00:13:56,640 --> 00:13:59,400
imports.
And the full recovery from that
194
00:13:59,400 --> 00:14:02,480
took years.
And that is not hypothetical
195
00:14:02,480 --> 00:14:04,320
history.
It is a real example of how
196
00:14:04,320 --> 00:14:07,600
conflict can turn, you know,
infrastructure vulnerability
197
00:14:07,600 --> 00:14:13,760
into a humanitarian crisis.
So where the clean energy angle
198
00:14:13,920 --> 00:14:18,200
then coming in the story?
Yeah, it comes from the question
199
00:14:18,200 --> 00:14:22,120
of decoupling.
If water supply is too dependent
200
00:14:22,160 --> 00:14:28,160
on centralized fossil heavy
fragile power systems, then one
201
00:14:28,520 --> 00:14:32,680
response is to redesign the
relationship in electricity.
202
00:14:33,160 --> 00:14:37,600
More efficient desalina tion,
more distributed power, more
203
00:14:37,600 --> 00:14:41,160
storage and more backup provides
more resilience.
204
00:14:42,200 --> 00:14:44,920
And the region is already under
pressure, even without this
205
00:14:44,920 --> 00:14:48,120
crising.
So the International Energy
206
00:14:48,120 --> 00:14:51,120
Agency reported last year that
the electricity demand across
207
00:14:51,120 --> 00:14:54,800
the Middle East and North Africa
is surging, driven heavily by
208
00:14:54,800 --> 00:14:58,280
cooling and desalina tion.
He said that around 40% of
209
00:14:58,280 --> 00:15:01,520
projected increase in
electricity demand over the next
210
00:15:01,520 --> 00:15:06,480
decade is expected to come from
these two needs alone, air
211
00:15:06,480 --> 00:15:09,160
conditioning and water desalina
tion.
212
00:15:10,040 --> 00:15:15,480
It's an it's a very important
statistic, 40% of the increase
213
00:15:15,480 --> 00:15:18,400
in demand coming from cooling
and desalina tion.
214
00:15:18,840 --> 00:15:22,640
So when people talk about energy
transition in the region, they
215
00:15:22,640 --> 00:15:27,160
often jump straight to exports,
hydrogen or big industrial
216
00:15:27,160 --> 00:15:30,120
strategy.
But actually one of the most
217
00:15:30,120 --> 00:15:32,840
urgent issues is much more
fundamental.
218
00:15:33,240 --> 00:15:36,920
Can the region build electricity
systems that are resilient
219
00:15:36,920 --> 00:15:41,840
enough to support water security
in a hotter, dryer and more
220
00:15:41,840 --> 00:15:45,320
volatile future?
And this crisis is kind of wake
221
00:15:45,320 --> 00:15:49,600
up call because it reveals that
the water infrastructure is not
222
00:15:49,600 --> 00:15:54,920
just a separate, you mean the
Aryan category, a utility is
223
00:15:54,920 --> 00:15:57,560
deeply embedded in the energy
system design.
224
00:15:58,680 --> 00:16:02,800
Now it's also true that Desalina
Tion has its own sustainability
225
00:16:02,800 --> 00:16:06,000
challenges.
It is energy intensive, it can
226
00:16:06,000 --> 00:16:10,640
be carbon intensive, it creates
brine discharge issues about
227
00:16:10,640 --> 00:16:12,360
which we've talked in previous
episodes.
228
00:16:13,720 --> 00:16:18,800
So it's it's quite clear that
Desalina tion plants are highly
229
00:16:18,800 --> 00:16:22,720
energy intensive and emit large
amounts of carbon while being
230
00:16:22,720 --> 00:16:26,360
vulnerable to extreme weather
and rising sea levels.
231
00:16:26,840 --> 00:16:30,360
So the answer is not simply more
desalina tion, the answer is
232
00:16:30,360 --> 00:16:34,320
better desalina tion, cleaner
desalina tion, and more
233
00:16:34,800 --> 00:16:37,640
resilient desalina tion.
Right.
234
00:16:37,720 --> 00:16:41,040
And more intelligently
integrated systems, reverse
235
00:16:41,040 --> 00:16:45,360
osmosis, renewable power,
desalina, tion, energy storage,
236
00:16:45,440 --> 00:16:48,800
demand management, backup
reservoirs.
237
00:16:49,080 --> 00:16:53,480
These are not just side issues
anymore, they're basic security
238
00:16:53,480 --> 00:16:58,800
related issues.
And this is one of the important
239
00:16:58,800 --> 00:17:01,880
things from this episode, I
think, on how we rethink the
240
00:17:02,440 --> 00:17:06,119
link between the energy, the
superpower generation and the
241
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clean and the water part and our
resilient and the connected the
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two systems are.
Yeah, because if electricity
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fails, people are uncomfortable.
If water fails, people are
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essentially in danger.
Yeah, exactly.
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And the concentration of risk is
also not trivial.
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00:17:30,160 --> 00:17:34,240
Smaller states like Bahrain,
Qatar and Kuwait have fewer
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backup supplies than some of
their neighbors, even though
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00:17:37,360 --> 00:17:41,400
countries such as Saudi Arabia
and the UAE have invested more
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in pipelines, storage reservoirs
and redundancy.
250
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That you know unevenness matters
during the time of conflict like
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this.
It also matters politically
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because once water
infrastructure is perceives as
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00:17:56,520 --> 00:17:59,920
vulnerable, governments have
stronger incentives to support
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more resilient form of power
supply.
255
00:18:04,440 --> 00:18:08,720
Yeah, and that, again, is the
theme running through today's
256
00:18:08,720 --> 00:18:12,280
episode.
This conflict may accelerate
257
00:18:12,280 --> 00:18:15,680
parts of the transition less
because government suddenly
258
00:18:15,680 --> 00:18:22,160
become greener and more because
they became aware of fragility.
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00:18:23,400 --> 00:18:29,640
So pulling down the second
segment in one sentence, this
260
00:18:29,640 --> 00:18:34,120
crisis is posing that in the
Gulf, clean power and clean
261
00:18:34,120 --> 00:18:37,800
water are no long separate
conversation, but very linked
262
00:18:37,800 --> 00:18:39,200
together.
Yeah.
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00:18:39,360 --> 00:18:43,440
And, and once this is seen, it's
it's hard to Unsee it.
264
00:18:43,840 --> 00:18:48,200
So now, Carmen, let's move to
the third and probably one of
265
00:18:48,200 --> 00:18:51,760
the most important parts of the
story, which is everything
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00:18:51,760 --> 00:18:56,040
people don't usually think about
when they think about the Middle
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00:18:56,040 --> 00:19:00,560
East.
Yes, the Eden commodities
268
00:19:00,720 --> 00:19:04,800
because he's worried this crisis
is not only distracting the
269
00:19:04,800 --> 00:19:07,560
research part and other
resources is also affecting
270
00:19:08,320 --> 00:19:12,400
supply chains on fertilizers,
helium and other industrial
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00:19:12,400 --> 00:19:16,600
inputs that sit much deeper in
our economies.
272
00:19:16,920 --> 00:19:20,800
Yeah, starting with fertilizer.
There's a Reuters report
273
00:19:20,800 --> 00:19:24,600
covering this very closely and
the implications are huge.
274
00:19:26,000 --> 00:19:30,280
It is said that the state of
Hormuz carries some 30% of
275
00:19:30,280 --> 00:19:34,160
globally traded fertilizers.
Another reported that more than
276
00:19:34,160 --> 00:19:39,000
30% of global nitrogen
fertilizer supplies, including
277
00:19:39,000 --> 00:19:42,200
urea and sulphur, passed through
the state of Hormuz.
278
00:19:43,240 --> 00:19:49,440
Bank of America warned that that
the conflict threatens 65 to 75%
279
00:19:49,440 --> 00:19:54,160
of global urea supplies.
I think some sources indicate
280
00:19:54,160 --> 00:19:57,440
that prices are already up by 30
to 40%.
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00:19:58,600 --> 00:20:02,120
And that immediately takes us
from energy security to food
282
00:20:02,200 --> 00:20:05,200
security, because fertilizer is
not a niche commodity.
283
00:20:06,280 --> 00:20:09,360
Letters and notes that
fertilizers support around half
284
00:20:09,360 --> 00:20:12,920
of the globe food production, so
when that supply chain is
285
00:20:12,920 --> 00:20:16,360
disrupted, the consequences
don't go store, don't stop at
286
00:20:16,360 --> 00:20:18,920
firm input cost.
They are global.
287
00:20:20,240 --> 00:20:23,800
Yeah, and we are already seeing
that pressure.
288
00:20:23,800 --> 00:20:28,200
It is reported that US prices
for some fertilizers were up by
289
00:20:28,200 --> 00:20:32,000
as much as 32%.
Middle Eastern urea prices has
290
00:20:32,000 --> 00:20:37,680
surged by 40% and in Ukraine,
officials were talking about 30
291
00:20:37,680 --> 00:20:44,880
to 35% increases in fertilizer
with urea up 65% since January.
292
00:20:44,880 --> 00:20:47,520
So significant increases all,
all across the board.
293
00:20:49,360 --> 00:20:53,560
Which is why this conflict is
being described as fresh food
294
00:20:53,640 --> 00:20:56,520
price risk for vulnerable
countries.
295
00:20:57,600 --> 00:21:00,760
And it's been reported in many
emerging countries.
296
00:21:01,600 --> 00:21:06,680
In many emerging countries, food
and fuel make from 30 to 50% of
297
00:21:06,680 --> 00:21:10,240
consumer spending.
So these kind of shocks really
298
00:21:10,240 --> 00:21:13,240
matters.
Yeah, and there's also a
299
00:21:13,360 --> 00:21:16,920
structural point here.
Fertilizer is both shipping
300
00:21:16,920 --> 00:21:20,720
dependent and gas dependent.
Nitrogen fertilizer relies
301
00:21:20,720 --> 00:21:22,680
heavily on natural gas as
feedstock.
302
00:21:22,960 --> 00:21:26,560
So when war disrupts a gas
infrastructure and maritime
303
00:21:27,280 --> 00:21:32,120
routes at the same time,
fertilizer gets squeezed twice.
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00:21:34,040 --> 00:21:37,120
Now this.
Opens up an interesting link to
305
00:21:37,120 --> 00:21:40,160
clean energy because if
countries and companies wants to
306
00:21:40,160 --> 00:21:42,400
reduce the kind of
vulnerability, one part is not
307
00:21:42,400 --> 00:21:46,640
just diversifying the trade
routes but also developing low
308
00:21:46,760 --> 00:21:50,440
lower risk form of ammonia and
fertilizer production, including
309
00:21:50,800 --> 00:21:53,560
routes tied to renewable power
over time.
310
00:21:54,120 --> 00:21:57,160
Exactly.
This is where the conversation
311
00:21:57,160 --> 00:22:03,920
starts to move beyond replace
oil with solar and into how do
312
00:22:03,920 --> 00:22:08,680
we build industrial systems that
are less hostage to fossil fuel
313
00:22:08,960 --> 00:22:14,000
and choke point risk.
So let's bring the alien part,
314
00:22:14,000 --> 00:22:16,640
the alien story now, because
this is one of those commodities
315
00:22:16,640 --> 00:22:20,400
most people never think about
until there is a suddenly a
316
00:22:20,400 --> 00:22:22,040
shortage.
Yeah.
317
00:22:23,640 --> 00:22:27,960
Reuters reported recently that
disruptions to Qatar's gas
318
00:22:27,960 --> 00:22:32,240
processing had driven helium
spot prices to double since the
319
00:22:32,240 --> 00:22:35,760
crisis began.
That matters because helium is
320
00:22:35,800 --> 00:22:38,760
extracted as a by product of
natural gas processing.
321
00:22:38,760 --> 00:22:42,640
So if LNG output output is
disrupted, helium supply is
322
00:22:42,640 --> 00:22:47,000
disrupted too.
And Qatar is not a minor player
323
00:22:47,000 --> 00:22:50,000
here.
Without dipping into the number,
324
00:22:50,000 --> 00:22:54,120
let's think about almost 1/3 of
what supply is coming from
325
00:22:54,120 --> 00:22:56,960
there.
Wow, that's extraordinary
326
00:22:56,960 --> 00:22:59,240
concentration for such a
critical mineral.
327
00:22:59,600 --> 00:23:08,520
And just to tell our tell our
audience at what uses helium MRI
328
00:23:08,520 --> 00:23:12,000
machines, semiconductor
manufacturing, aerospace,
329
00:23:12,000 --> 00:23:15,440
scientific equipment, sectors
that are central to both
330
00:23:15,440 --> 00:23:17,240
healthcare and advanced
industry.
331
00:23:18,040 --> 00:23:21,280
South Korea's chip makers have
enough helium inventory for now,
332
00:23:21,640 --> 00:23:24,880
but they are paying premiums to
secure supply, and the
333
00:23:24,880 --> 00:23:30,080
government sees helium and
bromine as among key materials
334
00:23:30,080 --> 00:23:32,240
at risk if the conflict
persists.
335
00:23:33,640 --> 00:23:38,640
And so even in this study we see
as a conflict is impacting
336
00:23:38,640 --> 00:23:43,000
supply chains checkpoints and
this can suddenly becomes
337
00:23:44,280 --> 00:23:47,800
semiconductor story, a medical
image story and AI
338
00:23:47,800 --> 00:23:51,920
infrastructure story risk.
And if you're listening to this
339
00:23:52,200 --> 00:23:57,160
from the outside or from outside
the energy world, that's the key
340
00:23:57,160 --> 00:24:00,400
message.
Commodity interdependence means
341
00:24:00,400 --> 00:24:03,960
a conflict that begins with
tankers and terminals can end up
342
00:24:03,960 --> 00:24:09,120
affecting farms, hospitals and
chip fabrication facilities.
343
00:24:10,400 --> 00:24:12,360
So we talk about fertilizer and
helium.
344
00:24:14,040 --> 00:24:17,840
There is also discussion about
disruption of Petro chemicals
345
00:24:17,840 --> 00:24:22,160
and plastics because we have
more than 40% for example of
346
00:24:22,160 --> 00:24:27,320
global political and export in
2025 that is coming from the
347
00:24:27,320 --> 00:24:31,840
Middle East and pricing surging
as supplies tighten.
348
00:24:32,440 --> 00:24:38,800
So the wider point is the region
a significant that goes beyond
349
00:24:39,000 --> 00:24:43,960
resources but also industrial,
which is why.
350
00:24:44,200 --> 00:24:48,000
I think the third segment
changes the way we talk about
351
00:24:48,000 --> 00:24:52,680
resilience.
It is not enough to say we need
352
00:24:52,680 --> 00:24:55,880
more energy security.
The more complete statement
353
00:24:55,880 --> 00:25:02,040
should be we need cleaner, more
diversified, less geographically
354
00:25:02,040 --> 00:25:06,080
concentrated supply systems
across energy and industry.
355
00:25:07,000 --> 00:25:10,520
The reason clean energy matters
here is that it can reduce
356
00:25:10,520 --> 00:25:15,280
exposure on multiple levels.
It can lower dependence on
357
00:25:15,320 --> 00:25:18,160
resources, it can support
domestic industrial
358
00:25:18,160 --> 00:25:20,880
electrification.
It can eventually underpin a new
359
00:25:20,880 --> 00:25:23,440
rules for producing inputs like
ammonia.
360
00:25:24,400 --> 00:25:28,280
And it can make economies less
vulnerable to knock out the fat
361
00:25:29,080 --> 00:25:31,280
on these disruptions.
Yeah.
362
00:25:32,000 --> 00:25:36,400
So in that sense, this conflict
is broadening the clean
363
00:25:36,400 --> 00:25:39,640
transition conversation.
It's no longer just about
364
00:25:39,640 --> 00:25:43,760
decarbonizing the grid.
It's about building economies
365
00:25:43,920 --> 00:25:50,120
that are less brittle.
And this will be one of the most
366
00:25:50,120 --> 00:25:53,360
durable legacies about what
we're living today.
367
00:25:54,400 --> 00:25:59,440
OK, now as we are approaching
the end of this episode, let's
368
00:25:59,440 --> 00:26:03,560
step back and connect the dots.
We started with energy, where
369
00:26:03,560 --> 00:26:06,640
the war is sharpening the case
for renewables, storage and
370
00:26:06,640 --> 00:26:09,120
electrification as tools of
national security.
371
00:26:09,920 --> 00:26:14,840
We then move to water where the
conflict is exposing how
372
00:26:14,840 --> 00:26:18,960
vulnerable desalina tion
dependent systems are when power
373
00:26:18,960 --> 00:26:21,280
and water infrastructure are
tightly coupled.
374
00:26:21,920 --> 00:26:25,240
And finally, we looked at other
commodities including
375
00:26:25,240 --> 00:26:29,720
fertilizer, helium and hidden
communities as we call them,
376
00:26:30,080 --> 00:26:34,760
where the conflict driven
disruption is rippling into
377
00:26:34,760 --> 00:26:38,360
agriculture, into healthcare,
semiconductors and even
378
00:26:38,360 --> 00:26:42,560
manufacturing sectors that we
didn't think were getting
379
00:26:42,560 --> 00:26:44,920
disrupted immediately after the
Wharf.
380
00:26:45,960 --> 00:26:50,560
And the common trend is
fragility linked to centralized
381
00:26:50,560 --> 00:26:52,640
systems.
We talk about long supply
382
00:26:52,640 --> 00:26:57,560
chains, checkpoints, dependence
on natural resources, heavy
383
00:26:57,560 --> 00:27:00,200
concentration in few facilities
of countries.
384
00:27:00,320 --> 00:27:06,480
We talk about risk.
Which leads to a bigger idea.
385
00:27:07,120 --> 00:27:10,600
Maybe the transition we are
talking about is not just an
386
00:27:10,600 --> 00:27:13,960
energy transition, maybe it is a
resilience transition.
387
00:27:15,280 --> 00:27:17,600
It's an interesting framing
because it captures something
388
00:27:17,600 --> 00:27:20,120
that climate language sometimes
misses.
389
00:27:21,360 --> 00:27:25,240
For some other things,
resilience is more probably
390
00:27:25,320 --> 00:27:30,520
understandable, easier to
digest, speaks to security,
391
00:27:30,600 --> 00:27:34,640
sovereignty, affordability,
continuity, readiness.
392
00:27:35,920 --> 00:27:41,480
Yeah, and the war in the Middle
East is making that framing hard
393
00:27:41,480 --> 00:27:45,160
to ignore.
The IMF has already warned that
394
00:27:45,160 --> 00:27:49,120
the shock is global, though
asymmetric, and that poorer
395
00:27:49,120 --> 00:27:53,400
countries are especially at risk
from higher food and fertilizer
396
00:27:53,440 --> 00:27:57,880
prices.
The G7 has said it is ready to
397
00:27:57,880 --> 00:28:02,000
take all the necessary measures
for energy and market stability.
398
00:28:02,680 --> 00:28:07,520
The IE again has made it's
largest ever emergency stock
399
00:28:07,640 --> 00:28:13,000
release of of crude oil.
These are not small or marginal
400
00:28:13,000 --> 00:28:16,640
signals, they tell you.
Policy makers see this as
401
00:28:16,640 --> 00:28:21,280
systemic.
And as you also mentioned before
402
00:28:21,280 --> 00:28:22,720
Richie, there are some answers
here.
403
00:28:22,800 --> 00:28:26,760
Doesn't all discussion does not
automatically follow that every
404
00:28:26,760 --> 00:28:30,120
government will respond by
accelerating energy transition.
405
00:28:30,640 --> 00:28:36,760
Some may double down on short
term fossil back up.
406
00:28:38,320 --> 00:28:41,000
That is the dimension of time.
That is the dimension of the
407
00:28:41,000 --> 00:28:46,680
inertia of the energy systems.
That's right.
408
00:28:47,520 --> 00:28:52,360
So the argument is not that the
war neatly and immediately helps
409
00:28:52,360 --> 00:28:54,840
the transition.
That's not what we are saying in
410
00:28:54,840 --> 00:28:58,240
this episode.
The the argument here is that
411
00:28:58,240 --> 00:29:02,680
the war exposes the strategic
weaknesses of the existing
412
00:29:02,680 --> 00:29:07,240
system and in doing so improves
the long term case for clean,
413
00:29:07,600 --> 00:29:10,960
electrified and diversified
alternatives.
414
00:29:13,280 --> 00:29:16,000
Maybe the most important
distinction to this episode,
415
00:29:16,000 --> 00:29:18,920
there are also what we said
before, there are reaction in
416
00:29:18,920 --> 00:29:21,360
short term versus long term
direction.
417
00:29:22,640 --> 00:29:24,960
Short term, the picture can be
messy.
418
00:29:24,960 --> 00:29:29,360
Higher fossil prices.
Temporary coal fall back.
419
00:29:30,040 --> 00:29:33,840
Emergency subsidies, Panic
buying supplies, family.
420
00:29:34,760 --> 00:29:38,640
Any long term, the lesson might
be very clear.
421
00:29:38,640 --> 00:29:44,360
Countries rely on important
other resources, probably less
422
00:29:44,440 --> 00:29:48,280
building stronger grades, link
clean energy to water security,
423
00:29:48,280 --> 00:29:51,440
diversify critical inputs are
likely to better position in a
424
00:29:51,440 --> 00:29:56,080
world where this disruption is
not so rare.
425
00:29:57,040 --> 00:30:01,200
Yeah, and that the world does
not feel theoretical anymore.
426
00:30:02,960 --> 00:30:12,280
So Rishi, let's then wrap up, I
think has been very interesting
427
00:30:12,360 --> 00:30:18,080
episode.
My take away probably first we
428
00:30:18,080 --> 00:30:22,160
see government start now being
more explicit about framing the
429
00:30:22,160 --> 00:30:25,600
energy transition with the
security apart.
430
00:30:26,720 --> 00:30:30,120
It was interesting to look at
the water resilience especially
431
00:30:30,120 --> 00:30:33,120
in the Desalina tion and linked
to clean power.
432
00:30:33,960 --> 00:30:40,040
And 3rd, they had industrial
policy start to take all the
433
00:30:40,040 --> 00:30:44,120
other commodities we discussed
about fertilizer, helium, other
434
00:30:44,120 --> 00:30:47,160
strategic materials more
seriously in the context of
435
00:30:47,360 --> 00:30:48,800
resilience.
Yeah.
436
00:30:49,280 --> 00:30:52,320
And I'd also add one more.
Let's keep an eye on the
437
00:30:52,320 --> 00:30:56,200
language, because language often
tells you when a shift is
438
00:30:56,200 --> 00:30:58,600
happening.
If the conversation moves from
439
00:30:58,720 --> 00:31:03,440
climate ambition to resilience,
security, self-reliance and
440
00:31:03,440 --> 00:31:06,720
critical systems, that may be a
sign that the politics of clean
441
00:31:06,720 --> 00:31:15,520
energy are entering a new phase.
A phase that is probably more
442
00:31:16,400 --> 00:31:19,320
based on facts and hard
experience.
443
00:31:20,040 --> 00:31:25,640
Yeah, and sadly, a global
conflicts often force those
444
00:31:25,640 --> 00:31:30,520
realizations upon us.
Thank you Richie for the great
445
00:31:30,520 --> 00:31:33,960
episode.
Thank you, Carmine, and thanks
446
00:31:34,320 --> 00:31:36,720
to all our audience around the
world for listening to
447
00:31:36,720 --> 00:31:40,040
Sustainability Forward.
If you found this episode
448
00:31:40,040 --> 00:31:44,120
useful, do share it, and as
always, we'd love to hear what
449
00:31:44,120 --> 00:31:44,600
you think.
