Transcript for Pop!Tech Thomas Friedman

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THOMAS FRIEDMAN POP! TECH 2006

I just got here and I'm really looking forward to this interaction.

I'm going to talk just for 20 minutes, as we've all been allotted,

in my columns which is very simple; Why this is not your parents' energy crisis.

Why what is going on today is something fundamentally new and different

and really requires us to think about and redefine

And let me just quickly go through the 7 or 8 reasons I believe this

is not your parents' energy crisis.

The first has to do with the fact that we are in a war on terrorism today

with people funded and fueled by our energy purchases.

Yes, ladies and gentlemen, we are funding both sides of the war on terrorism.

How smart is that?

We're funding the U.S Army, Air Force, Marine Corps, CIA, DIA, NSA,

with our tax dollars and we fund Islamic Jihad, Hamas, Al Qaeda,

Saudi Arabia, Iran, and all the charities and institutions that

support these groups directly or indirectly with our energy purchases.

We are in a war and we are funding both sides of the war.

And we often—or we rarely, I should say, connect the dots.

But every once in a while you can see an event that goes by on the news screen

that really shows you the degree to which we aren't connecting the events.

And one of those was a couple years ago--when, in the same week, two things happened.

The first was our Congress, in its infinite wisdom, rejected any attempt to impose higher CAFE--

higher mileage standards on auto makers in Detroit.

And in the same week, down in Cancun, Mexico,

the World Trade Organization talks collapsed over the refusal

of the United States, Japan and Europe to reduce their

subsidies to their farmers so farmers in the developing world

could grow more and sell their products.

When I saw those two things happen,

I said "let's think about what that actually means."

What that meant was that the fact that we weren't improving

our CAFE standards, we would make ever-increasing transfer payments--

via Exxon, and Chevron, and Shell-to Saudi Arabia which would make

ever-increasing transfer payments to various Saudi mosque charities and madrassahs.

And one of those charities would build a madrassah somewhere

in the Muslim world, somewhere like Pakistan in a village in Pakistan.

Now the same week, by virtue of the fact that we refused to make any compromise

on our vast subsidy to our cotton farmers--

and other farmers, not to mention the Europeans and Japan,

we ensured that somewhere out there in the developing world,

a cotton farmer somewhere--say in Pakistan just went bankrupt.

Now our cotton farmer has 2 sons.

He sends them both to the local madrassah that was just built

down the street because they serve a hot lunch every day

and the public school's completely broken down.

Madrasah curriculums are as simple as almost all religious study courses

—no technology, no real science and 1 poli sci course—a very short course.

And the poli sci course says that all your troubles

are because of America, Israel, and Jews—a very short course.

Now one day one of the sons of our Pakistani cotton farmer

decides to join the jihad in Afghanistan against the United States.

And one day one of your sons in US Special Forces, kills him.

And we think we're winning the war on terrorism. Not a chance.

So the first reason this is not your parents' energy crisis is because

our consumption of energy, both the scale and the nature of it,

is fundamentally related to the geopolitical predicament we're in.

Second reason this is not your parents' energy crisis is that

the world is flat.

The world is flat and 3 billion new consumers called India, China

and the former Soviet Empire--opened up and walked onto the playing field.

And when did they arrive?

Just when it has been flattened.

Just when they could plug and play, compete, connect,

and collaborate with your kids and mine, more efficiently, cheaply than ever before.

And they all arrived with their own version of the American dream—

a house, a car, a toaster, a microwave, a refrigerator, and a PC—with a printer.

If we don't find an alternative to fossil fuels to power their future,

we're going to burn up, choke up, heat up, and smoke up this planet

when it's flat, so much faster than even Al Gore predicts.

And that leads to the third reason this is not your parents' energy crisis

and that is that clean power--green technology--

is going to be THE growth industry of the 21st century.

It is going to be THE growth industry.

Mom and Dad tell your kids, if you want to be sure of a good upper middle class job,

go in to green design, green manufacturing, green consulting, green services.

This is going to be THE growth industry of the 21st century.

It has to be—or there is going to be no planet.

And what that means to me is that China is going to go green.

But China is going to go green because China can't breathe.

China's growing at 10% and is giving back at least 2% now every year--

in the form of lost work days, gridlock traffic, air pollution, ill health of workers.

So China is going to have to go green.

And I think green China? Green China is going to be an even

bigger challenge for us than red China.

Because when China goes green, China's going to go green

on the basis of low cost, scaleable, green technologies.

If these technologies aren't low cost for the Chinese market, they won't scale.

And if they don't scale, they will not have an impact.

And so China, I believe, is poised to become, I think, a major green innovator.

Maybe you caught the front page story in the Wall Street Journal last week about SunTech Power holdings.

The richest man in China today is a solar power engineer.

If you enjoyed importing all your hybrid engines from Japan,

if you loved having to import all your wind turbines from Denmark--

you're going to love what you have to import from China.

There's only one way—only one way for us to confront that challenge.

And that is with government regulation--that doesn't rig the market, doesn't fix the market--

but sets broad, clear, and stringent guidelines on American mileage standards--

China's mileage standards today are already more severe than our own.

--mileage standards, appliance standards, and power generation standards—

like California is doing today.

Like a state--a state--like Texas did--

--in 1999 with the Texas Renewable Energy Standard--told the local electric companies,

"You guys are going to have to produce 2,000 megawatts a year of renewable energy by the year 2009.

They all protested, "No way! No how!"

But that visionary Texas Governor said, "You will do it and I'm signing this."

Who was that man? [audience laugher]. Who was that man?

That man's name was George W. Bush.

If only—if only President Bush could meet Governor Bush [audience laughter].

The reason--a year after the President told us that we are addicted to oil--

and his government has done nothing of significance to address that deficit, that problem--

is precisely because there's a huge fight in this administration

between what I would call market fundamentalists who say, "Just let the market work"—

--led by Dick Cheney. "See the market's working, the price of oil just went down."

And those who understand—those who understand that the role of

government is to set broad standards, tough guidelines,

and then let the market achieve them.

The fourth reason that this is not your parents' energy crisis

has to do with the slide. Could you key the slide?

Let's get out of the way here for a second. I'll explain this.

I posited this in an article in "Foreign Policy Magazine" a couple months ago.

I call it the first law of petropolitics.

And the first law of petropolitics states that the price of oil and the pace of freedom operate in an inverse correlation.

As the price of oil goes up, the pace of freedom goes down.

And as the price of oil goes down, the pace of freedom goes up

--in what I call petrolist or petroauthoritarian countries.

Petrolist or petroauthoritarian countries are countries that are

highly dependent on oil for their GDP and have very weak institutions.

Norway is not such a country but, obviously, Venezuela, Saudi Arabia, Angola, Equatorial Guinea are.

Now, basically--I illustrated this--what I did was I plotted the price of oil from 1979 to the present, on 1 graph

and then I overlaid on it for--Nigeria, Russia, Venezuela, Saudi Arabia--

the Freedom House Freedom Index for these countries.

And what you see is roughly this graph.

1979 price of oil skyrocketed—you know—with the Iranian revolution.

And then it slowly started to decline, cratering in 1995--

With all due respect to Ronald Reagan, who brought down the Soviet Union--

the price of crude oil, the day the Soviet Union collapsed, hit $16 a barrel.

That's not an accident.

Now, basically, as the price of oil went down, the pace of freedom went up.

So--The Berlin Wall came down in 1989.

Back in the early 90's Iran was having a free and fair election

where all kinds of reformers and reformers' parties got elected.

Reformist journals and magazines were opening and Iran's reformist President was calling for a Dialogue of Civilizations.

Yeah, $20, $30 a barrel—Iran was calling for a dialogue of civilization.

At $70 a barrel, Iran is calling for the destruction of Israel and

declaring that the Holocaust is a myth.

I can guarantee you, at $20 a barrel, the Holocaust is not a myth. [audience laughter]

At $30 a barrel George Bush looked into Vladimir Putin's soul--the President of Russia and saw a good man down there.

At $70 a barrel you look into Putin's soul you'll see Gaspron, Lucos--

every TV station and newspaper, not to mention government institution, that he's devoured.

The price of oil and the pace of freedom operate in an inverse correlation.

This is critically important.

Because basically what's happened, is that we thought that the fall of the Berlin Wall

was going to unleash an unstoppable tide of free markets and free people.

And for about 15 years that was the case.

But that fall of the Wall coincided with oil at $30 to $40 a barrel.

As we've moved from a world of $30 to $40 a barrel of oil,

to a world of $60 to $80 a barrel of oil,

what's happened is that the fall-of-the-Berlin-Wall-wave

has suddenly encountered a counter-wave.

A counter-tide of petroauthoritarian states called Venezuela, Iran, Russia, Angola,

Saudi Arabia, Equatorial Guinea, Sudan, and all of these states, basically,

now have petroauthoritarian regimes ensconced in power.

And this trend of petroauthoritarianism has the potential to completely

poison geopolitics if we see another 10 years of this.

Did you follow the debate at the UN a couple weeks ago?

The UN Security Council wanted to send peacekeeping troops to

Sudan to stop a massive genocide—a documented genocide.

Open and shut case. The UN wants to send troops to stop a genocide.

And guess who blocked it? China. Why?

Because China owns 40% of the Sudan oil company.

That's petropolitics poisoning geopolitics in action.

I'll do a little quiz with you. Which was the first Arab Gulf state to run out of oil?

Actually, excuse me. Which was the first Arab Gulf state to discover oil?

The first Arab Gulf state to discover oil was Bahrain,

a tiny state off the east coast of Saudi Arabia.

The first Arab Gulf state to run out of oil was Bahrain.

The first Arab Gulf state to hold a free and fair election,

where women could run and vote, was Bahrain.

The first Arab Gulf state to sign a free trade agreement with the United States was--Bahrain.

And the first Arab Gulf state to completely reform its labor laws—because its people had to work--

—say it with me now—was [audience laughter] Bahrain.

This is not an accident, friends.

The price of oil and the pace of freedom operate in an inverse correlation.

The last reason this is not your parents' energy crisis is very simple.

And my host, Bruce Taylor, really helped me think this through.

It's very simple.

Google and Yahoo are the China and India of the world of bits and bytes.

As these companies have to build more server farms--

these and every other company, every bank, every brokerage firm, every university--

every time you search on Google, you don't think about it,

but at the other end of that search, is a little burst of power, a little fan cooling that power--

Okay? And a little meter reading that power.

Now I know you heard this morning about the scale of clicking that's going to happen in the world?

The amount of energy that is going to start to consume as everything moves to the web,

is going to mean that Google and Yahoo! become to this energy problem the parallel of what the rise in China and India are.

And if we don't find a way to solve that, we are also not only going to run out of energy,

but we're going to limit and start to constrict our ability to take avantage of these incredible networks and the power within them.

To sum it all up, and for all these reasons, friend,

if you want to know what I'm up to in my column

I'm really up to trying to redefine green.

I'm a big believer that in the columnist business

to name something is to own it.

If you really want to own an issue, you name that issue.

The world is flat.

And the problem with green—the problem with the word green?

is it was subtly named and appropriated all these years

by the people who hated it.

And they named it liberal, girly man, unpatriotic, sissy—vaguely French--

[audience laughter]

That's what they did.

And what I'm all about, in my little slice of this campaign,

is to rename green, geopolitical, geostrategic, capitalistic, patriotic.

Green, my friends, is the new red, white, and blue.

Thank you very much.

[audience clapping]