CFR Master Class Series With Amy Jaffe

Tuesday, June 30, 2020

David M. Rubenstein Senior Fellow for Energy and the Environment and Director of the Program on Energy Security and Climate Change, Council on Foreign Relations; @AmyJaffeenergy


Vice President, Deputy Director of Studies, and Nelson and David Rockefeller Senior Fellow for Latin America Studies, Council on Foreign Relations; @shannonkoneil

Amy Jaffe discusses energy innovation and U.S.-China relations, including an assessment of the energy strategies of the two countries, how these strategies influence the bilateral relationship, and their impact on foreign policy, climate change, and economic rivalry. 

The CFR Master Class Series is a weekly 45-minute session hosted by Vice President and Deputy Director for Studies Shannon O’Neil in which a CFR fellow will take a step back from the news and discuss the fundamentals essential to understanding a given country, region of the world, or issue pertaining to U.S. foreign policy or international relations.

O’NEIL: Thanks, Meaghan. Hello, everyone. I’m Shannon O’Neil. I’m a vice president for studies here at the Council on Foreign Relations. And I’m my pleasure to welcome you here to the third of our CFR Master Class Series. For those who have joined us before, as you know this is an opportunity for the next forty-five minutes. It’s going to be Tuesday afternoons, 4:00-4:45, to get beyond the headlines and really focus in on the fundamentals of a country, a region, or an issue. And in this case, today we are going to be taking on energy.

So we have here with us Amy Myers Jaffe. She is—many of you know here—but she is the David M. Rubenstein senior fellow for energy and the environment. She has had a long career spanning academia and the private sector looking at issues of energy. And she has a book coming out with Columbia University Pres next spring, it’s now in the process, called Energy’s Digital Future, so focusing on what is next for energy.

As we’ve done before, I’m going to turn it over to her. She’s going to talk for about eight minutes, lay out some of the big themes to guide our discussion. Then I will open it up to all of you members for your questions and a broader conversation. So, Amy, let me give it to you.

JAFFE: Thank you very much, Shannon. Well, it’s a pleasure to be here, and be here with all of you. I think the first step is for me to tell you, what do I mean by digital energy? So I don’t mean, you know, just, you know, the energy related to your smartphone, but there are going to be all kinds of applications—digital applications that are going to have impact on how you use energy for transportation, how we control and get our electricity, and even in manufacturing.

So think self-driving cars. Think resilient solar panels with battery storage and smart grid. Think smart cities, with self-driving cars that are all operated around a 5G network. And then also think about 3-D printing, you know, think about how we were able to shift quickly to 3-D printing when we needed medical equipment rapidly. A lot of that taps the design and Internet of Things. All of that is cyber-vulnerable. All of it is digital. And all of it can absolutely reduce the need or oil.

And so I’m going to talk to you a little bit today about why is it important in the United States that we remain digital energy leader? How is that forging a competition with China, which has sort of declared as its industrial policy to dominate the digital energy space? And what will it mean for the relationship between the two countries?

So just a few facts to get us started: Energy innovation has been a critical part of U.S. national security and economic vitality since the turn of the nineteenth century. So think Edison batteries and electricity, mass electricity and distribution, think Ford manufacturing innovation, and how it really propelled the United States not only to become a global economic power, but even to help win World War I. And then fast-forward to today. We’ve got five U.S. companies—Apple, Facebook, Microsoft, Google, Alphabet—spending $160 billion up till this year on R&D on these digital technologies. In 2017, U.S. R&D of all U.S. companies was between $325 (billion) and $350 billion, for one year.

So I think a lot of people think, well, hey, you know, it just happens naturally and therefore we don’t have to have a government industrial policy. We don’t have to think about digital energy. It’s just happening on its own. You know, I’ve been to Tempe, Arizona and I’ve seen robot taxis taking people around and I know it’s going to work. But the problem with that is none of this stuff is by accident. Many of you might be aware that the whole idea of autonomous vehicles began with a Pentagon contest in the Mojave Desert in 2004.

You might not be aware anymore, or remember, that in 1987 the U.S. semiconductor industry was so failing it only represented 17 percent of the market and we were going to be overtaken by technology from Japan. And with a small $500 million investment in a firm venture, private partnership, private-public partnership called Semitech, the United States got back to where it is today, which is to be an unchallenged leader in semiconductors. And the other one—and if we weren’t in that situation, you can just imagine what a grimmer future we would not be future.

And then I like to remind people about the 1958 National Defense Act, where the Congress committed $1 billion to retrain manpower in the aftermath of the space race. And let me remind you that GPS was originally developed not so that you could find your way to your grandmother’s house when it’s dark, but actually as a way to track the Sputnik satellite, so the United States would always know where it was and what it was doing. So—and then, of course, there’s the history of nuclear power. So just throwing out a few examples where the government intervened on something related to national security and you could think about how that contributed—those kinds of things contributed intensely to U.S. economic vitality and competitiveness.

So now onto China. China has made a commitment—you know, close a trillion-dollar commitment to win in this digital energy space. And they—that’s batteries. That’s self-driving vehicles, drones, advanced manufacturing, everything across the board. They are actively trying to dominate these markets. One of the consequences internationally that could be a problem would be if China were to be so successful that they would establish their own rules for cyber intrusion, or the export of its digital surveillance practices.

I mean, for those of you who are not aware, every citizen in China has a social rating which is based on their digital footprint, which is monitored by the Communist Party. And your ability to get credit, to have a house, to have a job is all based on this surveillance—some of which is using facial recognition software. If you jaywalk, the Chinese government knows it. If you borrow somebody’s bicycle without asking them, they know it, right? And the idea that that standard could become a global standard is dangerous for everybody who is living in a democracy, in addition to the security element of having the intrusion.

China’s been trying to lockdown a more leadership position in the ISO, which is the International Telecommunications Union for standardization. So Chinese products, versus American products, versus global product standards, also in the ITU, the International Telecommunications Union. We have our withdrawal, the United States, from the Paris accord, which puts the Chinese at an advantage on the next round of negotiations, if we stay out, that are going to involve how to bring carbon markets together and have global integration.

So there’s a lot at stake. And of course, China leverages its market as a tool, because it’s an unparalleled consumer market for all the commercial aspects of these products we’re talking about—whether that’s e-commerce, or drones, or ridesharing. And you have eight hundred million Chinese using the internet. Their online shopping market is $1 trillion. They have surpassed now the United States in annual new car registrations, twenty-one million for China. We’re seventeen million when we’re not in a recession. Japan, by comparison, is a little over four million. China now represents 50 percent of all global investment in renewable energy.

And here is the big point, summing up this last point: Because the Chinese market’s so big, and because the United States doesn’t have a consistent industrial policy and a consistent drive towards digital energy, you have companies going to China to capture that market because they can’t make a go of it here. I’ll just give one really concrete example: Tesla, which, as you know, has battled up and down, up and down stock, finally gets permission, opens a factory in Shanghai. Stock goes to, you know, close to $1,000 a share.

They have announced their new technology. Besides having the battery and the car be able to go two ways—so, in other words, if you plugged your car into your home, it could be the battery storage for your home or it could sell the battery storage electricity back to the grid. They also have a new technology that is in their cars that is a hyper filter that would be able to be screening for pandemic and biowarfare. So that technology now, which we could have had advantageously as an American company, is now being produced in China for the Communist Party and others to use in China

And so I think we have to think about all these different systems. And our policy has been to reevaluate what technology should be restricted for sale to China. And I’m not saying that some of that isn’t needed, but in thinking about the path forward we really need to know, what is a winning U.S. strategy? And in my view, a winning U.S. strategy is one in which the United States invests in staying premier in these technologies, where we lead by example.

So we actually regulate these technologies properly and thoughtfully so that we’re protecting civil rights, we’re protecting privacy and personal security, we’re ensuring that these technologies are used in a way that lowers pollution and emissions and doesn’t accelerate too much use of fossil fuels that we need desperately in this country. And some states are doing it. Better electricity reform. That would really bring the innovation to the grid and the United States, bring more resilient. And what I would tell you in terms of the Chinese response to that, not only is there an advantage—because I think, you know, post-COVID-19 there’s a willingness of the part of U.S. allies to follow the U.S. lead, were we to step up to the plate, especially on this issue of secure supply chains and cyber.

But also, we’ve found that China has actually followed our lead in the past, that our car regulations have been mimicked by China, that our—you know, California’s cap-and-trade program for carbon has been mimicked by China. They came to California. They had a joint venture with California State scholars to figure out how to do certain markets. So if we regulate things well, we’re setting an example for how China could do things differently which, at this point, is pretty imperative. So that’s what I would say in terms of where the United States needs to go forward.

And then, because we are going to have to take some actions to counter the Chinese, and we need to be, like, peer competitors, but we also need to look for opportunities where we have common interests on certain technologies. It could be something like carbon sequestration. Could be on other technologies where there’s a commercial benefit for both parties, even in bio and pharmaceuticals. Things where there’s a benefit and there’s not a national security implication in sharing technology. So with that, I’m going to thank you and look forward to your questions and discussion.

O’NEIL: Great. Thanks, Amy. I’m going to ask you the first question, but first, Meaghan, could you just give us—tell us again how people can line up to ask a question themselves?

STAFF: Of course.

(Gives queuing instructions.)

O’NEIL: Great. Thanks very much, Meaghan.

So, Amy, let me just ask you to take a step back from those details and sort of where we are going to with China and the like. Just take a step back. And could you paint a picture in two or maybe three areas of what a digital energy revolution actually means? What is it going to change from the way we do things today to some number of years in the future? What’s going to be different? Just give us a real concrete example of what this actually means.

JAFFE: So I think, you know, across the board it’s going to be very different. And I think that we can understand how it’s going to be different because we’re doing this meeting by video and we’re all getting used to that. So we’re able to telecommute. And when we telecommute, that means we’re not using our cars, and that reduces oil. But if you go beyond that and just think about—I mean, 3-D printing is kind of an interesting technology. We’re going to—basically what happens with 3-D printing is—which is now commonly used in the aerospace industry—is right now we have these very diverse supply chains.

We’ve all understood that because we were horrified to learn that certain materials we needed for antibiotics, or for solar panels, or for other, you know, vital things, medical equipment, we couldn’t actually get it because that supply chain got cut off during the start of the pandemic. And all of a sudden people said, well, wait, we could 3-D print that. And what that really means in practical terms is we could have a renaissance in manufacturing here in the United States using these digital technologies and manufacture more things here.

And because you wouldn’t be—so the example I like to tell people, take an aerospace engine. Cessna used to have an engine that had 895 parts. Those parts were produced all around the world and then they were brought to a central location for assembly, and then put in the plane for manufacturing. Today, Cessna’s going to make their Denali plane engine 3-D printed. It’s going to have eight parts. And those parts are all going to be printed where they’re going to manufacture the plane. And you’re starting to see that in other industries, where heavy design equipment is going to be printed right on site, and then assembled right on site.

And so all of that traffic that comes in container ships, and freight trucks, and all that activity that’s very energy intensive is going to be eliminated. And also, we’re going to have a much more secure supply chain from using that technology. The other one, you know, I can imagine a day when in a place like New York City—I know a lot of people dialing in today live in a major city, maybe the Bay area or other places where traffic congestion is a major problem. So people are envisioning a system where you would use some kind of, you know, train or other kinds of ways of getting around, or even just drive to a central point.

And then there would be this whole system of these automated robot cars that would be synchronized. You wouldn’t need traffic lights. You would just have pedestrian crossings. The whole system would be synchronized so that there’s just complete flow and no congestion. Lyft has already announced that they’re going to have their service when it goes AV also go electric. So you’re going to have sort of electric. But it brings a more critical aspect to how we manage these networks, because if my transportation in cities, and my manufacturing of vital equipment, and my home—you know, the electricity in my home is going to have all these, you know, Alexa, I want the temperature to be this. And then if there’s a storm it’s, Alexa, take the electricity from the battery.

Like, all these systems we’re actually going to be able to integrate our car battery with our home, so that when there’s a blackout you’re not going to go out and get a propane, diesel—or diesel generator, or some kind of side generator for your home, or for the apartment building, whatever. You’re going to have these sort of virtual systems, that are kind of like Alexa-like. You know, the problem with all that is that it all could be hackable.

And we need to have an understanding with China and other countries about what the rules of the road of that are going to be, that we’re going to all agree that we’re not going to have consequential civilian impacts, because the impacts will be quite large. If you imagine, you know, everybody’s going to be on AV and then they suddenly turn off the entire system. And that’s even, you know, more serious than some of the things we experience when there’s a blackout, which I know all of us have experienced.

O’NEIL: Great. Let me turn to the first question.

STAFF: Our first question will come from Paull Randt.

Q: Thank you, Amy. Thank you for—thank you, Shannon, as well.

My question is about the upstream inputs. And so when people talk about—whether it’s advanced battery technology, more efficient solar panels, and other kind of sources of energy and storage, my understanding is that a lot of the inputs for that are rare earths or minerals over which China may control the majority sourcing already. You know, does that set us up for a collision even if we control the ultimate, you know, manufacturer or the ultimate output of the technologies?

JAFFE: So, Paul, I’ve looked at that subject. And we are going to have a different geopolitics in the digital energy world. But I think that’s really going to be more about competing for having the best market systems and having the best supply chains but, more importantly, having the best role for technology innovation and improvement, and human capital, right? It’s important that we get on top of this human capital question and think about how we’re going to do that.

So the interesting thing about rare earth minerals is actually it isn’t actually in as short a supply as people say. And then as I mention innovation, you know, Tesla and others have come up with innovative ways to bypass cobalt, which is the one rare earth that people say might be the most bottlenecked. So really when you go really deep down into is it the minerals or is it something else, because there’s minerals in Australia. Believe it or not, we have some of the minerals here. There are other—you know, minerals in other locations. It’s not really that China has locked it all up.

What China has done is to, you know, same as we learned about medical equipment China is the premier place for processing all the lithium that’s needed to make the batteries, or for doing the processing of the silicon or other components that go into a solar panel. So part of the real problem is processing capacity to get to the final product. And that requires the United States I think thoughtfully to sit down and analyze, you know, what are these supply chains? What do we need to have done at home?

Europe has also initiated a $1 trillion program to make sure that as it transitions to electric vehicles, and batteries, and electricity—you know, like storage, and hydrogen systems, and so forth, so that they can use more renewable energy in their electricity system, they actually have an initiative to make sure that this processing is done in Europe, that there’s battery companies manufacturing in Europe. It’s going to cross the EU. And it’s a thought-through program. And we have no such program here in the United States.

And we’re confronting this massive challenge of unemployment in the United States. We have this opportunity to do something like the GI Bill, or like programs we’ve had in the past, like I mentioned the 1958 program, to put money down now, today, to educate people in these new fields, through community college system, or apprenticeships, or whatever, and to get these targeted businesses that we’re going to need for the future supply chain up and going, right? And not all of it’s mining. You know, a lot of it is actually sort of this more processing area and so forth.

So it really requires more than just worrying about whether or not, you know, China is or isn’t going to beat us to the—you know, to the cobalt in the Congo. It’s a much more complex challenge. And it requires really, truly an industrialization process that’s—you know, we could have something that’s not dissimilar from Semitech. I mean, that was highly successful. But for that, the United States would be in a bad place today if we weren’t dominant in semiconductors. That is the one thing that China still relies on us for all these industries they’re trying to compete with us on.

Part of the reason why the trade war has not gone further down the rabbit hole negative is because China’s dependent on semiconductors from the United States. So with all due respect, they could, you know, think about whether they want to cut us off from A or B, but then we would cut them off from semiconductors, and that would be bad too. So we really need to think through what do we need to do, the same way they’re thinking through what they need to do.

O’NEIL: Great. I’m going to follow up in a second on the geopolitics. But, Meaghan, could you just remind people how to ask a question?

STAFF: Sure.

(Gives queuing instructions.)

We do have another question in the queue that we can go to after your follow up, if you like, Shannon.

O’NEIL: Great. So, Amy, I wanted to take you to—we’ve been talking a little bit here about the winners of the future, whether it’s China or the United States. But I want you to take each of the winners of the past, or perhaps the present, right? And those are the old-school fossil fuel countries. So what happens to Saudi Arabia? What happens to OPEC? Where are those countries and that association in this whole game? How do we think about that?

JAFFE: Well, you know, it’s very interesting because, indeed, some of the countries you mention are also thinking about it. So you do see countries like Saudi Arabia and the United Arab Emirates are actually making investments to move their society forward and to invest in digital energy, and try to use the wealth they have now from oil to pivot to spend more on digital energy and sort of position themselves to the future. And Saudi Aramco has been particularly innovative in looking at how to collect carbon. They even have a research venture in Detroit looking at how to collect carbon from tailpipe of trucks.

So, you know, they have made these commitments. You’ve probably heard of the Saudi leadership has this vision for a special city that would be focused on robotics and other technologies of the future. So I think that some of those countries are aware of this trend that I’m talking about and are trying to position themselves to participate. But there are other places that are not going to be able to do that or are not organized in that way.

And we saw a little taste of that at the beginning of the pandemic, where we—where, you know, the administration had to suddenly worry about not just the, you know, debt-ridden nations of what we call the low-income countries, right? So worrying about countries where there’s a lot of poverty. We also had to worry about the credit sovereign failure of oil producing countries. So, Iraq. Ecuador. Colombia. Nigeria. Angola.

So there are a lot of countries for whom already just the problem of the low oil price has already created a sovereign credit problem that needs to be managed now between the World Bank, and the G-20, IMF, and so forth. We have loans forgiven to the end of the year, and we had this sort of plaza accord in oil where everybody, you know, cut back to try to prevent the oil price from being so low as to create a financial crisis. Among those states, in addition to other crises that have been happening because of the pandemic.

But long term, there really isn’t a glide path—a good glide path for how we’re going to help countries that have not positioned themselves for this new future. And, you know, when I first started writing—started the book, I would do an event like this and everybody would say: Listen, demand for oil is never going down. Never going to happen. You don’t need to write a book about—you don’t need a chapter on that, because it’s never going to happen. But now we can all imagine that that could happen. And we’re getting companies like BP and others talking about this possibility and what they as a company are doing to pivot.

So we do have this challenge to think about how to create a soft landing for countries. And the fact that the United States engaged in a negotiation, I call it the Goldilocks negotiation, for what’s too high an oil price and what’s too low an oil price, I think we’re going to see a little bit more of that.

O’NEIL: Let’s take the next question, please.

STAFF: Our next question is from Ryan Lance.

Q: Hello, Amy. Ryan Lance with ConocoPhillips. Thanks for joining.

So you painted an interesting picture of China, but the challenge—it would be interesting if you balanced that or juxtaposed that against what’s going wrong there right now, which is importing over 60 percent of their energy. Their solution is to burn coal. They claim it’s clean coal. But they’re converting coal to natural gas through gasification and just venting CO2 to the atmosphere. So the dual challenge that they have is quite remarkable on energy in order to even progress to this digital energy. And then you go to what Shannon described as the geopolitical impacts. They’re on the wrong side of most all of the geopolitical issues.

So they require the oil from Saudi Arabia, yet support Iran. They’re on the wrong side in Syria. They’re on the wrong side in Venezuela. So it’s an interesting juxtaposition against what their aspiration is with the hard reality on the ground today, and for probably the next decade and beyond, to kind of fulfill that aspiration. Would be interested if you would comment on that interesting juxtaposition.

JAFFE: So, Ryan, you’re 100 percent correct about that juxtaposition. They have a lot of inconsistency in how they’re operating at the national versus their aspirations and their—you know, supporting their national champion companies like Baidu, and Alibaba, and Huawei, and so forth—ZTE. But the interesting thing about it is what you’re saying is absolutely correct, and it’s an opportunity for the United States right now because you have these contrary things. I mean, they loaned all this money to do megaprojects through their Belt and Road Initiative.

And one of the problems that they’re going to face now with the pandemic is that these countries are not going to be able to pay them back. And they’ve bet badly. You know, as you know well, Ryan, I mean, they’ve bet badly in oil. You know, they bet on Sudan, and they bet on Iran, and they bet on Venezuela. You know, none of which panned out. And so I do think that they believe that they’re going to be able to move to this digital energy and that’s going to somehow eventually relinquish their pressure on all the oil imports. Of course, this year they’ve put so much in storage they’re hoping that’s going to help them out.

But I do think there’s this inconsistency. And again, there’s an opportunity on that for the United States because, to the extent that we want to lead, you know, we were leading with our exports. And now we’re vulnerable because we can’t sustain our energy exports because all of a sudden, you know, with the arbitrage to sell LNG, liquified natural gas, abroad is closed, and we have some—you know, the low price caused some companies to have to cut their capital expenditure. And so the outlook for how much oil we’ll have to export is possibly lower for the next year or two.

So we also need to be thinking about sort of a broader context for how to keep the United States economy competitive, and how that fits in with managing and taking advantage of these problems that the Chinese have right now. It’s a good time for the United States to try to be competitive. And we don’t want to have—I’ve never been a believer in the sort of, you know, we have to have an enemy and there has to be scare, right? You know, I can remember—as probably you can too, when in the ’80s, when everybody said that the Japanese had better management techniques and all Japanese companies were going to wipe out all U.S. industry. And of course, that didn’t take place.

But what I’m saying is that the Chinese do have this posture. They do—we have this problem. American companies go to China, and they have this issue where you’re forced to do a technology transfer. And we have to think thoughtfully about how where are we going to go competitively? You know, what do we need to be doing? And some of it’s going to be traditional industry, but digital’s going to be important in that too. I mean, one of the ways that your sector, Ryan, I believe, is going to lower costs and make a much more competitive industry is by going to robotics, and AI, and automation, right?

So you know, understanding the potential digital and where it plays in then creates this opportunity where we have to have a parallel track with China. You know, just saying restriction, restriction, restriction is not going to get us where we need to go. The restrictions can only go so far because we have a much smaller market. I mean, how does that help the car companies, you know, when we have 350 million and they have 1.4 billion people?

You know, in the end, we need to be looking for two sets of activities: Activities we can do that’s positive trade and positive international coordination with China, and places where we’re making sure that we’re competitive, whether that’s national defense and dual use, or whether that’s making sure that the products and industries that we’re investing in are going to be those that are not only going to be producing jobs this year and next year, but twenty years from now.

O’NEIL: Great. Let’s take the next question.

STAFF: Our next question is from Patricia Rosenfield.

Q: Thank you very much. And thank you, Amy and Shannon, for this really important forward-looking discussion. But as you discussed earlier, I’d like to look back. Oh, Patricia Rosenfield. I’m at the Rockefeller Archive Center, as you know.

And looking back on the period of the Sputnik and even before, when Vannevar Bush convinced Truman to set up the National Science Foundation, and we were really focusing on basic issues in science and technology, and that didn’t last. And then we have STEM here, which also—I’m going back to the question which has—you know, it’s there. It’s a changed investment in education. But it also seems to be running into the same problems of sort of a political reality check of how this—the kind of industrial policy with the smart regulations that you’re talking about internally in the United States is going to happen.

So I would love your perspective on the politics of this, and how to convince—so we don’t break down, as we did with the COVID situation, into a state-by-state policy, how we revive the idea that for both parties, no matter who wins in November, that a smart industrialization policy that looks at digital, and digital energy, and digital throughout the economy and influencing investments in training and business—how that happens. Because I think it could get lost. It’s not fashionable. You know, it just doesn’t seem to be on the—talked about as a national priority.

JAFFE: So the interesting thing is, you know, having been up to the Hill and talked on this subject, there is actually a lot of interest in it on both sides of the aisle. So it’s really about, you know, how do we make this, you know, not New York state has a policy or, you know, California’s spending some of the money from the cap-and-trade program on energy innovation? So I think that, you know, to me one of the big problems is you have this cluster, this ecosystem around Silicon Valley. And, to some smaller extent, you know, maybe Route 128 in Boston, or some discrete locations like that, where you have some kind of university epicenter or a bunch of companies all formed in one city.

You know, that’s not good because that’s divided us as a country. You know, there’s this perception that you’ve got some people over here, and they’re all doing well, and then everybody else is doing badly. And we need to move away from that. And you know, one of the ways that I’ve talked about and written about, and some of the Midwestern former governors have looked at other kinds of solutions to do the same thing, is having sort of regional initiatives that would be funded by the federal government where they could be—you know, how do you create the ecosystem?

You have to have some basic science, like you’re saying, so the federal government would set up an innovation center in different universities in different parts of the country, or colleges. And then you would look at—you know, one example somebody told me in the Rust Belt was an idea to take—you know, say there was a plant that shut down that was making automobile glass, right? You know, how could you rejigger that plant, that physical stuff, and retool it so that it could move into some of these, you know, new technologies of the future market, and then compete, you know, with China, with their low-cost labor? And some of that’s really going to be robotics and some of these digital technologies, which means you have to train people.

So to me, this thing about training people and doing it—having these regional centers where you’re sort of building up an ecosystem of private sector, public funds, you know, university, college, community college systems. I mean, I think a lot of people who are not from California don’t actually know what a big place—what a big role Santa Clara plays. You know, we’re all—everybody who knows about Silicon Valley associates that with Stanford.

But there’s a set of other schools that are—that no one would ever think to apply to if you didn’t live in that area that feed jobs into the tech industry, and good jobs. And even community colleges that do that. So it’s really about how do we create that atmosphere? And then DOE originally, you know, had looked at having these centers of excellence. And I think we could go back to that.

O’NEIL: Great. Let’s take another question.

STAFF: Next question is from Fred Hochberg.

Q: Hi, there. This has been a great conversation.

I have two somewhat unrelated questions. And I came in five minutes late, so hopefully you didn’t address this already. Is nuclear power just sort of not really a viable option in countries with a strong civil society because of the strong opposition to nuclear power? And then related, as I heard earlier in your talk, with so much telecommuting, which will take congestion off the road, will that also relieve the pressure on automated vehicles? Because one of the I think impetus for that is then the roads can’t get any larger, so there’s a push towards automated vehicles. But would that change, I’m wondering, with so much telecommuting that may arise out of this COVID emergency?

JAFFE: So I think COVID raises some interesting questions. I have this idea in my head. I think I might have read some Silicon Valley report. I’m imagining a robot vehicle where it has some UV thing so that when you get out of the car it UVs all the germs out of the car, and then the next person gets in it and it’s totally safe. I mean, I’m thinking that. Like, that’s going to be the next thing we’re going to hear about. And believe it or not, Silicon Valley is also working on human drones—so, drones that will carry you from one rooftop to another, and therefore you’re not in traffic at all, right?

So I do think there are these, you know, weird things that people are doing. There’s other people, companies that are working on virtual meetings—so, like a hologram. So instead of us all being flat here in two dimension we’d all be in, like, a virtual—we’d have the room of CFR, where we can right now no longer go, and with fifty people, and we would all, like, hologram ourselves around a table. So we would see ourselves in three dimension. Or some of us would be there in person and some of us would hologram in. So there are a lot of weird things, I think, coming down the road here—virtual reality classes, and so forth.

So some of that is going to, like, change how we do things. But in terms of—in terms of what’s the path forward, you know, getting to the point where we’re doing it and, you know, you think about how far along China is in currencyless e-commerce. You know, we can’t just rest on our laurels that these technologies are going to be here, or that we’re going to lead in them, or that somehow it’s just going to happen magically. And I think that it’s going to take some intervention. And we could go in the opposite direction. We could just be in total gridlock. You know, everybody’s afraid to take a train, everybody’s afraid of public transportation. We’re afraid of an uber driver. And so everybody’s in a personal automobile. And then we’re nowhere.

And someone was reminding me today that when you go to—they were telling me about how they were visiting Ethiopia and working on a project there. And everybody’s in vehicles from, like, 1952, the United States. And so it does take a lot to turn over infrastructure. And it takes intervention.

O’NEIL: Great. Well, thank you, Amy, for this peek into the future of energy and what digital brings to us. We’ve reached the end of our time here. All of you who joined us today, thank you very much. Next week we’re going to turn back to a little bit more traditional international relations. We’re going to have Steve Sestanovich talk to us about retrenchment in U.S. foreign policy. So please join us next week, and please join me in thanking Amy for today’s class.

JAFFE: Thank you, all.


Top Stories on CFR

NATO (North Atlantic Treaty Organization)

The war in Ukraine marks a new era of instability in Europe. Countering Russia’s efforts will require a stronger, more coordinated NATO.


After the rise of Chinese power during the 2010s and failed U.S. policies in the Indo-Pacific, the United States should renew the Pivot to Asia and place the region at the center of its grand strategy.*


Far-right advances in the European Parliament elections have destabilized politics in France, a longstanding pillar of the European Union, and highlighted fault lines in the bloc.