This is an extract. Read the full interview here.

What drove us to write the book was the misunderstandings, myths and historical inaccuracies that I had seen in publications about the energy sector. I saw that both efficiency and technology were making a big change in the energy world and wanted to debunk the myth of peak oil that was very popular. The second factor was that there were many books about maybe oil on its own but very few about energy as in integrated concept including coal, gas, renewables etc. and that’s what we wanted to write about especially because when we wrote it the general consensus was that oil prices were going to be higher for longer and our view was the opposite!

The book is targeted at anyone who is interested in the energy world from a very open perspective, someone that could be an expert but also someone who approaches the energy sector without knowing the basics. People will learn about the history of the energy sector, our view of what the future could be and about the forces that are driving such a change.

“Dramatic change is happening globally to technologies, also changes to efficiency, changes to diversification of supply even in fossil fuels – the fracking revolution has been very important – all these drivers flatten what was perceived as a very volatile market in the energy world in which the risk of running out of energy drove prices higher.”

The title of the book comes as a homage to The World is Flat by Thomas L. Friedman, that as we know was a very popular book a few years ago. Dramatic change is happening globally to technologies, also changes to efficiency, changes to diversification of supply even in fossil fuels – the fracking revolution has been very important – all these drivers flatten what was perceived as a very volatile market in the energy world in which the risk of running out of energy drove prices higher. Like in the technology revolution, the dotcom bubble, the enormous amount of investments that have happened to accommodate the growth in energy demand have created a surplus of capacity that on one hand makes the risk of running out or of disruption of supply minimal and on the other means that it continues the expansion of sources of energy that reduce the dependence on OPEC or on fossil fuels. So demand is growing but not in a way in which it could risk the supply demand balance and at the same time technology is massively eroding the risk premiums and the pricing of different sources of energy, flattening the energy world.

“The concept of peak oil is extremely popular because as most conspiracy theories it is based on half truth and half lie.”

We have seen the first wave of the flattening of the energy world that is mostly a supply shock. Now we will see the next phase which is China growing as a developed country and growing its energy imports by 1-2%. We are being extremely optimistic about the transition of China to a consumer economy. The demand growth estimates will continue to go down. From a price perspective $20 a barrel oil was a price that was not good for consumers or producers. Consumers in Europe have not seen a dramatic improvement in gasoline prices, yet it has a negative impact in terms of growth of economies of producing countries. We will settle at a price that is $33-40, not much higher than that because then all those companies the US that have been suffering will come back with a vengeance. It has happened in the gas market in the past. For oil we’re in for low prices for longer, around the $30-40 level. There may be moments it goes lower or higher, but that low volatility will persist. If you think about gold, supply demand balance is extremely tight there is no oversupply yet prices have collapsed. There is also an effect of the massive amount of ETFs, of futures that were linked to the oil price for financial reasons. As the market becomes more adapted to the view that it won’t stay lower for longer also a lot of those financial instruments disappear and that also impacts the volatility.

“Decarbonisation of the economy is an unquestionable and unstoppable force because the disruptive technologies have not been and will not be erased in their growth because of low gas or oil prices.”

We consciously avoided taking a view on climate change in the book because we are not climate scientists and also
didn’t want to represent a political position. We do take it into account, as we talk about government regulation and the strive to address climate change. Decarbonisation of the economy is an unquestionable and unstoppable force because the disruptive technologies have not been and will not be erased in their growth because of low gas or oil prices. We mention that OPEC is wrong to think solar and wind are going to be reduced in their growth because of low oil prices – no. It’s a completely different position.

The Paris agreement was a huge disappointment for anyone who has climate change as the cornerstone of their concern. I am sceptical about the Paris agreements because if we wanted to really reduce emissions it would be extremely simple. China stops subsiding its coal companies, the European Union stops subsiding the automotive and steel industry and stops giving tax relief to state owned coal companies. That would immediately address the issue of C02 emissions and they’re not doing it. I’m more of a believer that it doesn’t even matter because technology and market forces will take care of it. I think it’s a disgrace that you go to Shanghai and can’t see the sun – that’s unacceptable. That should be addressed through policy but it’s not because they are state owned companies who employ a lot of people. I won’t go into the perverse incentives of keeping an industrial model that is obsolete.
The relentless slow driving force of technology will continue to surprise us all. Seeing it from a positive perspective, policy might help, but the last nail in the coffin of a carbon based economy is technology. Think of 3D printers. What they are going to do to the shipping industry we have not even started to think about.
Policy makers have only one thing on their mind, to sustain GDP for fiscal reasons. The way we calculate GDP is obsolete. Technology is going to take care of it and we will have to start addressing the beneficial cumulative impact of that technology.

The Energy World is Flat: Opportunities from the End of Peak Oil is out now published by Wiley.

After two failed investiture votes, it is likely that Spain will be heading for new elections in June. This period of political uncertainty, which started with the municipal elections, starts to show clear signs of economic impact.

There are many studies on the effect on the economy of political uncertainty. The IMF (Aisen and Vega, 2011) and Harvard (Alesina, Sule, Roubini, Swagel, 1996) explain that political instability and constant changes of policies and administrations have a direct impact on economic growth.

The first to suffer in an environment of constant political battle is consumption, investment and hiring decisions of domestic players. That is, it is Spaniards themselves who reduce economic activity seeing every day in the media a battery of impossible magic solutions, and calls to eliminate reforms that have supported growth.

Spanish consumer confidence -ICC – fell by twelve points so far in 2016. The ICC has dropped to 95.2 points, a level not seen since December 2014.

Capital flights reached 70.2 billion euros in 2015, mostly between October and December. Even if we consider the ECB cheaper lending effect, there is a clear negative effect.

Unemployment rose in February by 2,231 people.