Believe it or not it has been 20 years since Daniel Yergin released the epic book, “The Prize”, which detailed the history of oil. He has a new book titled “The Quest” which provides us an update not just on oil, but the energy industry in general. Energy may at times not seem that exciting, in fact we only seem to notice the excitement when oil prices go up, but the reality is when you think of the economy remember energy is the economy. You can take away the internet and it will be plenty painful, but we will manage to survive. Cut off power and you will not be able to do anything.
Mr. Yergin takes us on a journey through today’s economy and where the energy economy stands. The Oil industry is alive and well and with technology has fund new ways of extracting oil from the earth. The US due to shale deposits is becoming less dependent on foreign oil. There is also plenty of oil flowing from Canada thanks to the tar sands in Alberta. The downside to all this oil in the environmental costs. Do not fret about the foreign oil suppliers because due to the rise of the emerging markets there is still plenty of demand for their oil. Despite some people’s demands to bomb Iran there are plenty of countries who need their resource. Mr. Yergin does make the point regarding Iran’s nuclear energy plans, it is ridiculous. Why would a country with access to huge oil fields have a desire or need to invest in nuclear?
On renewable energy sources a great deal of time is spent on the subject. The one thing that comes through is that whatever the renewable whatever the goal, it will take time. This means decades. There are many countries pursuing different energy source. The French have bought into Nuclear, which realistically is the shortest route to moving off oil, however it has some serious issues (Three Mile Island, Chernobyl, etc..). The Danes have driven wind power. The Chinese and Germans have driven ahead in Solar. All this will take time. As history has taught us it is that if oil prices drop than many of these initiatives will fall into the back burner until oil prices rise again.
One final thing tha Mr. Yergin points out is that many countries have an incentive to get off of oil for a simple reason: security. Countries like China, who are heavily dependent on oil imports are looking to diversify while also being environmentally friendly – therefore they take the lead in Solar. The same can be said for many countries, including the United States. In the end Daniel Yergin has woven together a very interesting and compelling read. There is a lot more to this book, but I can only suggest you read:-)
Good Night and Good Luck
Hans Henrik Hoffmann March 2, 2012
Hans Hoffmann's Blog 