Good morning, good afternoon, or good evening, wherever you are in the world. Welcome to episode 265 of the Climate Confident Podcast. My name is Tom Raftery, and welcome to the first ever Climate Confident+ bonus episode. You're hearing this because you are a subscriber to Climate Confident+, thank you for that. Previously, as a subscriber, you had exclusive access to the back catalogue of episodes, but now I've opened up that back catalogue to everybody, which helps to show reach more people. It helps discoverability, it helps SEO, but it also meant I needed to give subscribers like yourselves something better in return. So from now on Climate Confident+ subscribers get these bonus episodes roughly every couple of weeks when something big happens in energy climate, geopolitics, or policy. And it matters now, not six weeks from now. I'll use these episodes to unpack it. Shorter, more immediate. More analytical and I'd argue more valuable. So this first bonus episode is about the unnecessary, illegal and profoundly ill-advised war being waged by the US and Israel on Iran, and what that war means for energy markets, emissions and energy security. Before we get into the energy and economic implications, let me say the obvious. War is always tragic. It's especially tragic when it's so unnecessary. The killings, the injuries, the trauma, the destruction, all of it is appalling. And in this case, the damage doesn't stop where the bombs land. It spreads into shipping, fuel prices, electricity markets, industrial costs, inflation, and climate progress. And on the question of legality, I want to be precise. I'm not presenting myself here as a court, but as Pedro Sanchez, president of Spain has said Spain regards this war as illegal. Reuters reported that Spain ruled out taking part in military operations in the street of Hormuz on that basis. So this is not just a military story, it's an energy story, it's an economic story, and if you care about decarbonization, and obviously you do, or you wouldn't be listening to this, it's a climate story too. So let's start with what has happened. This war has widened very quickly. According to the Guardian US Defence Secretary, Pete Hegseth has said there is no timeframe for ending the war. He also said that the US had already struck more than 7,000 targets across Iran and its military infrastructure. At the same time, the conflict has spread into attacks on energy infrastructure. Israeli strikes, hit Iran's South Pars gas field, Iran, then retaliated by striking Ras Laffan in Qatar, the world's largest liquid natural gas export hub. The Financial Times reports that the damage at Ras Laffan affects facilities producing 17% of Qatar Energy LNG export capacity, and that repairs could take three to five years. And the guardian reports that Qatar accounted for roughly one fifth of the global LNG market last year with about 80% of that supply going to developing economies in Asia. That's not regional inconvenience. That is a global energy shock and not one that's going to go away anytime soon. And it lands on top of a deeper weakness in the fossil fuel system, the strait of Hormuz. The BBC reports that one fifth of the world's oil and gas passes through that narrow waterway. If your energy system depends on tankers getting through an active war zone, that's not energy security. That's exposure. So what does all this mean for energy markets? The first answer is simple. Fossil fuel dependence is once again acting as a war tax on the global economy. In my most recent blog post, I stated that roughly $88.7 billion was burned in the first 17 days of this conflict through direct military spending and wider economic damage. And to be clear, that figure is illustrative rather than audited. Governments are not exactly famous for transparent war accounting, but the order of magnitude matters. The opportunity cost is staggering. Using 2024 IRENA cost benchmarks, I calculated that the same $88.7 billion could instead buy roughly 128 gigawatts of utility scale solar, or 85 gigawatts of onshore wind, or 462 gigawatt hours of battery storage. These are not small numbers. These are system shaping numbers, and the US Department of Defence has requested $200 billion from Congress to continue the war. One of the most perverse truths in energy is that every fossil fuel war ends up making the case for electrification stronger. Oil and gas keep getting sold as strategic assets, and then promptly behave like liabilities with excellent lobbyists. And the market reaction has been predictable. In my blog post, I noted that Brent crude moved above $105 a barrel as traders priced in the risk disruption through Hormuz, and it's even higher now. And that matters far beyond the oil market itself. It matters for transport, it matters for shipping, it matters for fertiliser, and therefore food security. It matters for industrial heat, it matters for inflation, and it matters for any country or company still pretending that fossil fuel dependence is a form of realism. It's not. It's exposure to volatility dressed up as pragmatism. Now let's talk about emissions because there's a lazy assumption you often hear at times like this, that war slows economic activity, and so emissions must fall. Reality unfortunately is not always as simple as that. Wars like this often worsen the emissions picture, especially in the short term. First war itself is carbon intensive aircraft, naval deployments, logistics, munition supply chains, reconstruction. All of that burns huge amounts of fuel. Second. Supply shocks can trigger fallback to dirtier fuels. And the clearest example of that in the reporting is from India. The BBC reports that shipping disruptions linked to the war have squeezed gas supplies to India badly enough that the country risks shifting, at least temporarily back towards more polluting fuels, including coal, kerosene, and biomass. The Strait of Hormuz handles about half of India's liquid natural gas imports, and most of its LPG shipments. And another report notes that 21 ships remained stalled, keeping supply tight. In response, India has approved an extra 48,000 kiloliters of kerosene for states, and allowed restaurants and hotels temporarily to switch to biomass, kerosene, and coal for a month. That is a direct line from war to higher emissions. And there's another wrinkle here. The BBC also reports that India already gets 79% of its domestic energy from coal. So. Even where some users switch to electricity. If that electricity is still heavily coal powered, then the short term climate outcome may still get worse before it gets better. That matters because it keeps the analysis honest. A critic could reasonably say, hold on, electrification doesn't magically solve this overnight, and they'd be right. That's not the argument. The argument is not that renewables and electrification fix everything tomorrow. The argument is that the more an economy electrifies and the more it builds around renewables, storage, efficiency, and stronger grids, the less exposed it becomes to exactly this kind of fossil fuel shock. So yes, in the short term, this war is likely making emissions worse, but in the medium term. It should also strengthen the case for moving faster on electrification, renewables, storage, and grid resilience. So what should business leaders and policy makers take from all this? I think there are four big takeaways. First, treat electrification as a resilience strategy, not just a climate strategy. Second, treat renewables, storage, and grid flexibility as strategic infrastructure. Third, stress test your exposure to fossil fuel volatility properly, not just direct fuel use, but also shipping routes, feed stocks, power prices, supplier risk, transport costs, and insurance. And fourth. Do not let emergency measures turn into long-term fossil lock-in. That last point, matters a lot. In a crisis governments will do what they think they must do to keep systems functioning. Some of that is unavoidable, but if this ends with another round of long lived fossil infrastructure being built in the name of temporary security, then policy makers will have learned exactly the wrong lesson again. Now, let me be clear where I stand. I am angry about this war. I'm frustrated by it. It is senseless. It is destructive. It is economically reckless and like so many wars, it is being sold in the language of necessity by people who will not carry anything like the full cost. But I'm also strangely hopeful because if there is a glass half full reading here, it's this. Perhaps this latest shock helps finally bury one of the most persistent myths in energy policy. The idea that fossil fuel dependence equals security, it doesn't. Fossil dependence used to be held up as energy security. No more. Its fragility has been exposed. It is geopolitical exposure. Real energy security comes from electrification, renewables, storage, efficiency, and stronger grids, and the economics are increasingly pointing in the same direction. In my blog post, I noted that according to the International Energy Agency's World Energy Investment 2025, global investment in solar reached $450 billion in 2025, making it the single biggest item in world energy investment. I also cited IRENA's finding that 91% of newly commissioned utility scale renewable power projects produced cheaper electricity than the lowest cost new fossil alternative. That matters because it means this is no longer just the moral case, it's the strategic case, it's the economic case, and increasingly it is the energy security case too. So that's the first Climate Confident+ bonus episode. And again, if you're hearing it, it's because you support the show. And from my point of view, that support now gets you something more useful than archive access alone. It gets you timely independent analysis when events move faster than the regular publishing cycle. The essential point is simple. This war is a humanitarian tragedy. It's a geopolitical failure. It's also a systems lesson and a brutally expensive one. We are watching energy infrastructure attacked. We are watching LNG exports disrupted. We are watching shipping squeezed, and we are watching countries like India risk short term shifts back to dirtier fuels because gas supplies have tightened. The real question is no longer how to survive the next fossil shock. The real question is how quickly can we build energy systems that leave us less exposed to the next one? Thanks as ever for supporting Climate Confident+ if this episode was useful. Please share it with someone else who should hear it. And if there are topics you'd like me to tackle in future bonus episodes, send them my way. Email address Tom at Tom Raftery dot com. And as ever, the next regular episode of Climate Confident lands on next Wednesday, March 25th when I'll be talking to Arbour Energy co-founder and CEO Brad Hartwig about emission free gas turbines. It's an interesting episode. Watch out for it. That's all for now. Catch you in the next one.