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Introduction By:
Michael Klowden, President and CEO, Milken Institute

Moderator:
Michael Milken, Chairman, Milken Institute; Chairman, FasterCures / The Center for Accelerating Medical Solutions

The panelists in the lunch plenary discussed current global challenges, played off each other and the moderator, and engaged in a lively debate about the future of climate change and health care. It was interesting to note that despite their considerable collective expertise, they all confessed to uncertainty over the outcome of these global challenges.

They acknowledged, for example, that climate change is a problem but expressed uncertainty over the exact nature of that problem and its solution. It was noted that worldwide temperature changes have actually not been that dramatic, and that larger changes have actually been recorded at different times in the past. What is unique to the current situation, however, is the sharp increase in the level of CO2 in the atmosphere. Reversing this increase, they agreed, is perhaps the primary challenge the world faces if it hopes to prevent irreversible and potentially hazardous climate change.

The Kyoto Agreement is ultimately flawed, said Gary Becker, because it does not reduce CO2 emissions from the United States, China, India or any other developing countries. As an alternative to attempting CO2 emission reductions, the panelists were enthusiastic about the prospects for technological breakthroughs that might provide a method for reducing CO2 from the atmosphere, where the emissions tend to remain for a long time before breaking down. There is currently a great deal of government and private-sector research in this area.

Becker also proposed increased nuclear energy use In order to avoid fossil-fuel emissions entirely, Becker was a strong proponent for increased nuclear energy use in the United States. Mr. Becker noted that nuclear is a relatively clean and inexpensive energy source, and that many nations are already relying on it to a much greater extent than is the US.

A second significant problem is soaring health-care costs. As a society′s population ages, those costs increase significantly. In fact, the average annual expenditure for U.S. citizens over age 85 is more than $20,000. Additionally, there are fewer active workers to support each retiree, which results in slower economic growth. As a consequence, health-care costs consume an increasingly large proportion of economic output; they currently constitute 16 percent of U.S. GDP and 10 percent of world GDP, and these percentages are forecast to grow rapidly in the future.

One source of hope is that while medicine has high fixed costs, its variable costs are not that great. Therefore, the economic solution to caring for an aging population may involve greater reliance on medication, as opposed to doctor visits or hospital stays.

Not only are global populations aging rapidly, they are also becoming increasingly obese. Since 1980, the percentage of young people in the United States considered obese has soared. In the United States, one panelist noted, many people eat while engaged in some other activity, while in a country like France, eating is considered a primary activity. Plus, in America, portions tend to be 35 percent larger than in France.

In a study discussed at length by the panelists, more than a hundred variables were considered as possible causes for increasing obesity of America′s children. When all other factors were accounted for, it was determined that the principal reason for the increase since 1980 is a seismic shift in leisure activities from sports and other athletic pursuits to video games or Internet chat rooms.

There are no simple solutions, the panel concluded. Instead, a complex mix of government policies, business initiatives and individual choices will be necessary if we are to meet the challenges of the 21st century.

Moderator:
Glenn Yago, Director, Capital Studies, Milken Institute

The vast majority of the wealth creation in history has come over the past 200 years. These improvements have resulted, said moderator Glenn Yago of the Milken Institute, from technological innovations and financial innovations that have allowed for more efficient deployment of capital, and they have given nations, companies and individuals the ability to manage risk. With these thoughts in mind, a distinguished panel of financial innovators shared their ideas regarding the financial innovations that would unlock more value and generate further growth in the global economy.

Myron Scholes, a Nobel laureate known for his work in valuing options, began the panel by noting that many financial innovations result from major economic shocks. This idea drew widespread agreement from the panelists, who noted that one recent shock, Hurricane Katrina, has demonstrated the need for many new types of financial products.

One area of development, said Lewis Ranieri, is for private insurance for catastrophic events like hurricanes. As private insurers debated whether hurricane or flood insurance should cover Katrina's damages, and government agencies responded slowly, many small and medium-sized businesses collapsed because they did not receive the bridge financing required to survive. Financial innovations like the securitization of tax credits for low-income housing development could further improve the pace of the rebuilding effort, noted Yago.

Another source of financial innovation is regulatory change. Richard Kauffman of Goldman, Sachs & Co. shared that the first Basel Accord, which provided a regulatory framework for bank reserves, had the unanticipated consequence of widespread securitization. The second Basel Accord, if passed, would allow banks to allocate capital according to internal risk models rather than external rules, and has the promise of spurring further innovations to mitigate risk and manage a portfolio of assets. Building on these comments, Ranieri noted that the second Basel Accord has been stalled for nine years because of concerns over the widespread innovation and change it may unleash.

Many of the most celebrated financial innovations have been in the area of risk management and hedging, and corporate activities to manage financial risk were a source of much discussion. Panelist Michael Milken shared his concern that many industrial operating companies, like General Motors, have largely become financial companies with their vast financing activities and pension plans.

"We need to move industrial operating companies back to operating companies," Milken said, by unloading their financial businesses to companies better suited to managing the risks of these portfolios. One important innovation to improve the management of pension plans and other financial portfolios, noted Kauffman, is a liability management industry. Asset managers are evaluated according to equity market performance, but pension and other liabilities may not be tied to the same indicators as the assets that support them. In the discussion of corporate risk management and hedging activities, the panelists also expressed concern that the market may not be rewarding companies for hedging their risks, even though such actions may increase the return on invested capital. Kauffman noted that hedge funds, which focus on the return on invested capital, may be changing this market dynamic and rewarding risk-reduction activities. As Scholes and others responded positively to the question of corporate hedging activities, Milken cautioned that hedging activities were not worthwhile unless corporate managers were qualified to understand and evaluate their risks.

Myron Scholes also noted that financial innovation would be supported and encouraged by a better corporate accounting system. The current GAAP accounting system, he said, "makes no economic sense" because it does not reflect the innovations that have taken place. Pension plans and hedging activities are not accounted for on corporate balance sheets. By keeping these off the balance sheets, their perceived importance is diminished. Such an antiquated system, says Milken, encourages rash decisions by managers with little understanding of their risk.

From new accounting systems to new insurance products, the financial innovations session was filled with exciting ideas. These new ideas have the potential to unlock and create value, just as option markets, high-yield debt and the securitization of mortgages created value and generated economic growth over the past 30 years.

Moderator:
Graham Earnshaw, Editor-in-Chief, Xinhua Finance News

In 2005, China's GDP continued to grow at above 9 percent for the ninth year in a row. It is the world's growth engine, a major exporter and a big importer of oil, steel, cement and copper. But with this growth comes environmental problems caused by rampant urbanization, over-cultivation, low energy efficiency and the lack of relevant laws and regulations. How China deals with these issues will have a substantial impact on the rest of the planet. What measures can China take to use of energy and other un-renewable resources more efficiently? What can it do to balance out economic growth with environment protection? Is there a way for it to sustain its high growth without incurring high environmental costs?

The objectives of this high-level roundtable breakfast are to present an overview of some of the most compelling new areas of technology development in the sector, such as renewables, energy efficiency/conservation, pollution control, transmission and distribution infrastructure. Additionally, we'll explore the next steps in emerging financial markets involving energy and the environment and the growing opportunities in the carbon market. Are there new directions in infrastructure investment (e.g., renewable project finance) that might advance demand for these mission-critical financial and technological innovations? What policy and investment innovations are necessary to advance progress in our transition to more efficient, less costly and achievable energy independence? Preregistration is required for this invitation-only event.

Moderator:
John Cavalier, Managing Director and Chairman, Global Energy Group, Credit Suisse

Panelists explored the need for renewable energy sources and the future landscape of alternative energy in the United States. Energy, particularly affordable and sustainable energy, is undoubtedly central to global economics and well-being. As moderator John Cavalier of Credit Suisse noted, "The economic dislocations of high energy costs reverberate through the entire economy."

The group explored four imperatives for alternative energy sources. First, the dynamics of supply and (high) demand mean that the current scenario is unsustainable. "There's no question from a supply-and-demand perspective that demand is increasing by extraordinary rates," observed Daniel Weiss of Angelino Group LLC. Current oil prices are an obvious symptom of this issue, he said.

Second, the aging infrastructure of U.S. energy production and distribution means that the present system must be updated, likely in favor of renewable sources. As an example of the outdated infrastructure, panelists mentioned the limited oil refining capacity the United States. Indeed, the last refinery built in the United States was in the 1970s; it is unlikely that new ones will be built. The New York blackout of 2003 was cited as a symptom of the problem.

Panelists agreed that the environmental issues, particularly global warming associated with traditional energy, sourcing are a widespread and enduring concern.

Finally, the panel members discussed the geopolitical incentives for alternative energy. The growing American consensus is that the United States should be less dependent on foreign oil, given increasingly complicated politics of doing business with the oil-exporting countries and the concerns regarding national security.

While the reasons for establishing alternative energy sources are clear, the industry is just beginning to develop. Alternative energy includes wind, solar, geothermal, biofuel, clean coal and fuel cells, among others. At present, alternative energy constitutes just 6 percent of U.S. energy consumption; globally, this total is 12 percent to 13 percent. Overall, panelists expect this must and will increase dramatically in the coming years.

The U.S. government's role in this changing landscape will be significant, the panelists agreed. In order to foster development of the industry, the government should set standards for alternative energy sourcing (such as the required ethanol content in gasoline); provide financial (loan) guarantees for the more expensive infrastructure needs regarding alternative energy development; and continue existing tax credits and incentives (such as the $0.51 per gallon incentive for ethanol). As the industry develops over the long run, the government′s role in the industry is expected to dissipate.

Overall, panelists were optimistic about their growth expectations for alternative energy. As Weiss noted, "Real companies with real products and real profits are solving real problems [already]." Moreover, they said that cross-border learning would be essential to developing a vibrant alternative energy industry. Brazil, for example, was cited as an international leader. Alan MacDiarmid of the University of Pennsylvania commented that "we can learn a great deal from other companies and partnerships." Another panelist, Neil Koehler of Pacific Ethanol Inc., concurred that this global approach was necessary, stating that "In the future, there will be no one form of alternative energy that is suitable for any one country."

Moderator:
Michael Intriligator, Professor of Economics, Political Science and Public Policy, University of California, Los Angeles; Director, UCLA Center for International Relations; Senior Fellow, Milken Institute

Twenty years ago, the worst nuclear accident in history changed the landscape of not only what was then Western Soviet Union, but the nuclear energy industry as well. The accident at the Chernobyl plant in Ukraine on April 26, 1986, forced the evacuation of hundreds of thousands of people and the direct deaths of more than 50. In this roundtable, the ambassador from Belarus, whose country received more than half of the radioactive fallout, and an America expert on the accident will review the events that prompted this disaster. They'll compare contemporary public health and economic consequence estimates with what we now find 20 years later, and examine the legacy of Chernobyl and its impact on calls for more extensive use of nuclear energy as an alternative to fossil fuels.

Moderator:
Richard Sandor, Chairman and CEO, Chicago Climate Exchange Inc.; Senior Fellow, Milken Institute

An increasing number of financial players have entered environmental markets and a business solution to long-standing environmental concerns is taking shape. Over the past year, institutional investors controlling more that $21 trillion in assets have backed the Carbon Disclosure Project, an effort to record greenhouse gas emissions from the world's largest firms - and corporations, cities and markets are taking notice. Almost 50 public and private carbon funds and carbon-tender programs have been launched, with more than $1.5 billion in dedicated capital. Over the past year, the prices paid by carbon emitters to those who reduce carbon emissions rose more than 300 percent. Investments in clean technology are growing at more than 30 percent annually. Shareholder resolutions addressing climate change have been filed at more than 30 U.S. funds. There are many opportunities for investors and corporations in these new environmental markets and this panel will look at this expanding, profitable market from the perspective of hedge funds, rating agencies, pension funds, corporations and government.

Moderator:
Michael Milken, Chairman, Milken Institute; Chairman, FasterCures / The Center for Accelerating Medical Solutions

At the final lunchtime session of the 2006 Global Conference, chairman Michael Milken joined Nobel Prize winners F. Sherwood (Sherry) Rowland, Alan MacDiarmid and Steven Chu for a discussion of pressing scientific issues, including global warming and the global supply of energy and water. While the scientists did not refute Gary Becker's assertion from earlier in the week that "scientists are not very good at predicting the future," they showed the crowd that they have put considerable thought and research into solving the world′s most pressing issues.

All three distinguished scientists agreed that global warming was a real phenomenon. The year 2005 was the warmest of the last 150 years, and there has been a considerable increase in global surface temperatures, particularly in the Arctic region. Human activity has been instrumental in creating these effects, with increasing levels of atmospheric pollutants and carbon dioxide levels as a result of fossil fuel use and deforestation. Chu impressed the crowd with his clear explanation of increasing Arctic surface temperatures, and many were surprised to learn that non-carbon dioxide pollutants have increased temperatures by making Arctic ice dirty. This dirty ice is less reflective, increasing the amount of light absorbed by the polar ice caps. If Arctic ice melts and causes a change in ocean currents, said Rowland, it will "take over a thousand years to reverse the effects," which will include widespread changes in global temperature patterns.

Global warming may have a far-reaching impact on the global water supply, another of the Earth′s most pressing problems. While there is a tremendous supply of water on the planet, most of this is saltwater, which cannot immediately be used for irrigation or human consumption. Current desalination processes are too energy-intensive to be relied upon, forcing humans to improve water conservation. But global warming, said Chu, has the potential to impact the Earth's freshwater storage capacity. Most of the world′s freshwater systems are fed by the natural storage capacity of mountain snow and glacial ice. Should higher temperatures cause these to disappear, the state of California and other places throughout the world could face tremendous water shortages.

Alan MacDiarmid noted that he believes the world′s energy crisis to be the greatest scientific problem today. All the energy we use, he said, fundamentally comes from the sun′s energy. Through photosynthesis, plants and trees convert the sun's energy to our other forms of energy. With this in mind, he said he intends to spend the upcoming years trying to answer the question of whether the plants and plant wastes in the United States can efficiently generate enough ethanol to fully replace gasoline in automobiles. If so, this will reduce U.S. dependence on gasoline and global warming.

Chu offered a final cautionary note on global warming when he said that "the warmest period in the Earth's history was followed by the greatest mass extinction in human history." Scientists will play an important role in informing public policy and driving the technological innovations that will prevent our extinction and allow humankind to continue to thrive.

Moderator:
Glenn Yago, Director, Capital Studies, Milken Institute

Open recognition of the real risk of global warming has finally hit the table in the boardroom, and not a moment too soon, as both scientists and economists would appear to agree.

What was a major theme for many of conference panels was, in fact, the entire focus of this session, summed up by panelist Richard Sandor of the Chicago Climate Exchange with the succinct phrase, "You can do good and do well."

In this session, the panelists fleshed out this proposition in very concrete (or perhaps carbon) terms, demonstrating not only the success of their own firms, both in terms of emissions control and financial gain, but also suggested several ways in which market forces are providing powerful incentives for potentially limitless growth in this direction for businesses in all lines and across all borders.

Representing leaders in industry, finance and the rapidly developing climate exchange market, each panelist had hopeful insight to provide, based on his own experience on how saving the planet is not only possible, but profitable.

Beginning with the time-honored assumption that "as goes GM, so goes the United States," a mere nod in the direction of GM's current predicament provided the backdrop for the urgency with which leaders in the business community are turning toward green solutions in general, and to carbon asset markets, in particular. For the non-believers, Sandor pointed out that not long ago, the commoditization of debt was regarded as impossible. Now we have the commoditization of pollution.

Sandor explained that the general trajectory of government regulation was moving from no controls to what he characterized as the "one size fits all" controls of the 1970s and to the 1990 Clean Air Act, which for the first time targeted one environmental problem (acid rain) and one pollutant, sulfur dioxide (SO2). The subsequent success the act in dramatically lowering SO2 emissions led, even if only as an indirect consequence, to the establishment of opportunities for new financial markets, ultimately manifested in the Chicago Climate Exchange and later the European Climate Exchange.

Neil Eckert of the European Climate Exchange predicted a $2.3 trillion carbon market by 2012 but asserted that the liquidity required to foster continued entry from new sectors is dependent upon cap-and-trade legislation. He described the myriad opportunities for investment that caps provide to businesses seeking to meet emissions requirements and, in turn, trade carbon points, ranging from the energy needs of small businesses to the infrastructure needs of developing countries.

Sandor added to this that financial performance of publicly traded companies has been shown by market analysts to be influenced to a very real extent by their eco-performance, based on consumer preference. Tipping his hat to the increasingly popular theme of financial transparency, Sandor said "... in other words, now is not a good time to be a misogynist, homophobic, racist polluter in the world market."

Each panelist, when asked why he became involved in carbon trading, credited Sandor as both the inspiration and motivation, which would seem to go a long way toward emphasizing the importance of leadership and human capital in addressing the environmental problems facing the world today. Beyond their collective endorsement of Sandor's ideas, two reasons for involvement in this market were cited repeatedly: the first being necessity (cap), the second being opportunity (trade).

In the case of DuPont Co., according to Edward Mongan, the company′s director of energy and the environment, initial interest in reducing emissions stemmed directly from the Clean Air Act and the increased awareness in the early 1990s of the dangers of greenhouse gases. The realization that this could have potentially disastrous financial repercussions on DuPont's particular line prompted immediate action long before the company saw potential for financial growth through carbon trading -- which it eventually did, a point not to be overlooked.

In the first instance, however, merely in an attempt to meet tightening government regulations beginning with the Clean Air Act, DuPont enacted policies that reduced its output of greenhouse gases from 90 million metric tonnes in 1990 to roughly 25 million metric tonnes in 2003.

It also bears mentioning, said Mongan, that during the period from 1999 to the present, DuPont's emissions have remained relatively flat, but that production has increased by more than 30 percent. This would appear to imply increased efficiency in production, even in excess of what the figures on total emissions reflect, perhaps providing the emissions points that have propelled DuPont into a prominent position in the emissions market. Beyond the initial need to fall into line with government caps, the potential for revenue generation via emissions credit trading was a huge incentive, not only for DuPont's involvement in this market, but for its continued effort to decrease emissions levels.

Echoing Edwin Mongan's sentiments, Bill Marcus of Chicago Calyon Financial cited the sheer enormity of the market itself as his company's primary motivation for participation. As he explained, a certain level of liquidity in any given market automatically attracts other players to the field, regardless of their level of concern about the environment. By his estimation, the brokerage community's involvement in the carbon asset market has reached that point in its parabolic curve where it is poised to explode, with potential to become perhaps the largest financial market in history within the next 50 years.

Other ideas that were addressed on the subject of opportunities and challenges presented by a brand new asset class (such as carbon) included the creation of new bodies of experts who can analyze and study the role of such variables as weather, policy, new consumer bases, geographic borders and education on the development of the market and its efficacy, not only in financial terms but also in human and environmental terms. Increased attention from academia was called for in producing knowledge, especially with regard to the developing world, and Sandor announced that as of the previous week, the Chicago Climate Exchange had added its first Chinese company to the membership.

In response to a question from the audience about how to convince businesses to open carbon accounts -- in this case, based upon a disappointing meeting with a major player in the entertainment world -- Sandor and the other panelists suggested two strategies, one negative, the other positive.

It is indeed odd, Sandor pointed out, that for all of their lip service to environmental causes, there are currently no major Hollywood studios with carbon asset accounts, an example, he said, of what they call in Chicago a case of "all hat, no cattle."

Mongan suggested that the first thing would be to attract a given company's attention to its own carbon footprint. Running those numbers, which is not yet a standard practice, is frequently enough of an eye-opener to motivate a board of directors to move in a greener direction, especially in light of the likelihood of stricter government regulations.

Sandor added that along with risks posed by government intervention, there is also the potential for financial risk in the form of a class-action lawsuit from the effects of pollution, and in turn for related negative publicity. In the case of the particular Hollywood giant in question, he said, any connection between its emissions and associated health crises in children could be its undoing.

On the positive side, he added, the incentive for financial gain and the potential to be in the entertainment world what DuPont is in the chemical world, i.e., the leader, could prove to be the most powerful motivator.

Whether altruistic government regulation or profit-motivated innovation (or flexible and creative combinations of the two) actually has the potential to save the planet remains to be seen. One thing is apparent, however, and it is that potential exists beyond what might have been conceivable to most as little as five years ago. This panel not only demonstrated the enormous degree of change already occurring, but the ever-increasing opportunity for the business community as a whole to join this movement and increase its momentum.

Speaker:
Steven Chu, Nobel Laureate, Physics, 1997; Director, Lawrence Berkeley National Laboratory

Moderator:
Richard Sandor, Chairman and CEO, Chicago Climate Exchange Inc.; Senior Fellow, Milken Institute

Nobel Prize winner Steven Chu, introduced by Richard Sandor, founder of the Chicago Climate Exchange, built upon his earlier lunch lecture and discussed three major topics: the climate change caused by excess carbon dioxide in the atmosphere, the possibility that we will run out of oil and what we can do about each.

Chu began by reviewing the world's use of energy over time. By 2025, he predicted, the world will use three times the energy it did in1970. Given that we chiefly depend upon fossil fuels, this implies greater carbon dioxide in the atmosphere. Carbon dioxide lasts a long time; even if we stopped adding to it, the world would continue warming. At twice the carbon dioxide levels of pre-industrial times, the world climate would shift by several degrees, growing hotter in the Northern Hemisphere, colder in the Southern Hemisphere.

Chu cautioned the audience to not underestimate a few degrees: for example, he said, 8 degrees Celsius separates today's average temperatures from that of the last ice age. As the temperature rises, glaciers melt, reflecting less heat back into space and speeding the warming. Although the warmer weather should encourage more plant life, which would remove more carbon dioxide, even the most generous models do not predict much relief. Our agriculture in the Northern Hemisphere would be threatened by this climate change; already California farmers can no longer depend upon water from the Sierra Nevada Mountains.

Chu discussed the possibility of storing carbon dioxide underground, out of the atmosphere. Oil drillers are already using carbon dioxide to push out more oil. South Dakota actually exports carbon dioxide to Canada for this purpose. Unfortunately, if carbon dioxide leaks out, it can be deadly, and oil companies have been reluctant to monitor study how this leakage happens.

This growth in carbon dioxide as an asset is fueled by a dwindling resource: oil. The United States is the wealthiest country in the world and consumes the most energy per capita. Until 1970, the United States was a net exporter of oil; now it imports 60 percent of its oil. China seems poised to follow in the same path; it is now importing 50 percent of its oil and will have to increase to 75 percent soon. Although no one knows with certainty, predictions of a peak of oil production have been continually made. Chu said he doubts whether the world will run out of oil in the foreseeable future; current drilling methods only recover 30 percent to 40 percent of the oil available.

Chu said he believes we have two parallel paths for our energy needs: conservation and the development of new, cleaner energy. Although he said that the free market is the most nimble way to accomplish technology gains, he acknowledged that there are certain limitations, such as externalities (prices do not capture damage from pollution), and that free markets only promote local optimization in time or geography (a shortage of fish fuels more fishing). He used the example of refrigerators to show how government regulation can help the free market. Refrigerators have steadily gone up in size but have used continually less energy since the mid-1970s, when the federal government started requiring stricter energy guidelines. The real price for refrigerators has gone down, as well. This is an important example, since 40 percent of all energy is used to heat or cool, he said.

On the "supply side," Chu considered new fuel sources, such as coal, fusion, fission, wind, photocells and biomass. There seems to be at least 200 (perhaps a 1,000) years left of coal, he noted. Unfortunately, coal puts out even more emissions than oil. Chu dismissed fusion as not being a major player for the rest of this century, at least. Fission is marred by the waste and nuclear proliferation issues. Even if Yucca Mountain finally opens for nuclear waste, he said, it would be filled by 2010. Recycling the fuel reduces waste by a factor of 10, but involves plutonium, which can be "weaponized," creating a security risk. Wind is also a strong possibility as a new energy source; its cost is within 20 percent of commercial viability.

Chu seemed to feel that using biomass as an alternative fuel source was perhaps the strongest possibility. He noted that the recent history of agriculture has allowed us to feed more people on less land. In fact, he said, the federal government pays many farmers to not grow crops. New trade agreements will make it less likely that the United States can sell the heavily subsidized crops on the world market, making it ideal for biomass energy, such as conversion to ethanol.

Sandor discussed his reactions as an economist, saying that he found Chu's words sound. He said the question on pricing externalities was very interesting. For example, the United States passed a cap on sulfur emissions in response to the problem of acid rain. His organization, the Chicago Climate Exchange, manages the trading of the permits that allow the sulfur polluting. This, he said, set up price signals that encouraged scrubbers in smokestacks, the switch to low-sulfur coal and the switch to gas.

Both Chu and Sandor agreed there were large gains to be made in non-fossil fuel energy sources, particularly biomass. Sandor quoted a member of OPEC who said, "The Stone Age didn't end because they ran out of stones." Similarly, both men said they were optimistic that the world would shift to other energy sources well before our oil runs out.