Fracking, OPEC, and The Future of Energy
Kenneth Hersh, CEO of the George W. Bush Presidential Center and distinguished energy investor, joins David Salem, managing partner of Windhorse Capital Management, for a conversation on the history and the future of energy. Hersh shares with Salem his journey as the founder of energy investment firm Natural Gas Partners (NGP). Hersh catalogues five pivotal forces that have shaped energy markets: the rise of fracking, China’s expanding presence in global trade and commodities markets, OPEC’s evolving capacity to control global oil supplies and prices, nuclear power’s changing fortunes, and the growing influence of ESG mandates on capital flows and energy pricing. Hersh argues that natural gas has been the primary driver in the reduction of coal usage, which objectively is the most pollutant fossil fuel by a considerable margin. Hersh describes his efforts with the Global Adaptation Institute to mitigate the effects of climate change, as well as his ongoing stewardship of the George W. Bush Presidential Center. Salem closes with a “lightning round” where he asks Hersh about everything from Elon Musk’s carbon capture award to Saudi Arabia’s investment in Softbank to baseball. Filmed on January 25, 2021.
Key learnings: Hersh argues that fracking is key to decarbonization as it lessens the reliance on coal, which emits the most pollutants by far. He sheds light on the cartel dynamics of OPEC, which have been flipped on their head—U.S. production of oil has more than doubled, and the total supply of oil is (in effect) infinite. Also, the situation China finds itself in can further undermine OPEC’s influence as China has an abundance of supply oil from their investments in oil fields around the globe.