I have previously read several books by Daniel Yergin. The Prize was a Pulitzer Prize winner (also adapted for television by PBS and available on DVD), and was something I encouraged my staff (especially new hires) to read when I worked in the Dept of Energy. I love reading about economics and geopolitics, and for much of my work in energy policy, having a good grasp of the history of how we got to where we are is valuable — “Those who cannot remember the past are condemned to repeat it”. An equally good book by Yergin (co-written Joseph Stanislaus) was The Commanding Heights, which was not about energy, but rather a history of political economy in the twentieth century.
Naturally, The Quest was on my reading list. It is not simply a sequel to The Prize, as it is much more than a history. Its scope is also much broader than oil. Part One could be considered an update to The Prize, insofar as it discusses current issues in global oil markets and much of that revolves around geopolitics. There is much discussion of economic challenges facing the petroleum-rich but largely land-locked Russian and Caspian regions, the rise of petro states (especially Venezuela), the risks of Iraq acquiring nuclear weapons and the impact of a rapidly growing China on the world economy and global energy markets.
He provides a very useful discussion and perspective on peak oil, including the number of times fear of running out of oil has been an issue in the past. He points out how King Hubbert’s influential analysis and predictions ignore the critically important concept that reserves are not simply a physical concept. We are learning just how highly subject reserves can be to technology and prices, and the increasing importance of these factors in recent years, as evidenced by rise of unconventional oil and the impact of shale gas on gas markets.
The section on electricity provides an interesting historical perspective, somewhat reminiscent of Peter Tertzakian’s The End of Energy Obesity, starting with the roles and contributions of Edison and Tesla. He describes the “regulatory bargain” of Samuel Insull that promoted widespread investment and development of electricity systems, first in the USA and then in other countries. Following a lengthy discussion of the problems and prospects for nuclear generation of electricity (the book came out after the Japanese tsunami, and the effects of that are considered), Yergin describes the breakdown of the traditional regulatory structure for electricity. A useful and interesting perspective is provided on the causes of the California energy crisis in the aftermath of electricity deregulation.
One the most interesting parts of the book is the lengthy treatment of climate change. He starts with a history of the science and measurement of global temperature changes and the individual scientists that contributed to the science and understanding of the issue. He describes how climate change has now overtaken energy security to become the dominant energy policy issue. He also provides a reasonably succinct history of attempts to garner international cooperation on climate change policy starting with formation of the IPCC and followed by the 1992 Rio Conference, the 1997 Kyoto Accord and the subsequent and continuing international discord.
The final part of the book takes a detailed look at renewable energy technologies that are in various stages of development and adoption throughout the world. He describes the technologies in layman’s language and discusses their current and prospective economics and competitiveness. Complementing renewable technologies is energy conservation, which is steadily growing and accelerating with modern advances in information technology.
The Quest is information overload. I found it crammed full of anecdotes, interesting details and insights in every chapter and on many issues – history, economics and technology. An obvious advantage Daniel Yergin has from being head of a large organization like CERA is access to many researchers who could provide enough materials to fill several volumes. Thankfully he pared this tome down to 804 pages.