The energy industry has changed a lot in the past 25 years, but this book was disappointing. I'm guessing that two factors are driving my disappointment. The first is that Yergin did not have (or could not find) a strong narrative arc for this book. The Prize jumped from discovery to exploration to nationalization, but The Quest lacked that momentum. Yergin's histories of non-oil sectors (electricity, cars, renewables, etc.) did not always overlap or respond to the same forces. The reader thus needs to ignore (or enjoy) loose ends until they bind together. (Electric cars were a big deal 100 years ago and today; the middle era was very well connected to events in the automotive or oil sectors.)
The book is really a collection of briefs: The New World of Oil (since 1990), Securing the Supply (unconventional fuels), The Electric Age (and nuclear), Climate and Carbon (and failed treaties), New Energies (from sun to efficiency), and Road to the Future (batteries, biofuels and e-cars)
The other drag on the book was its over-broad, over-vague lack of focus. Although it's easier to see trends with decades of hindsight, it's a challenge to see them in current events where many people in many places are trying many actions in response to many beliefs. A book that summarizes the mish-mash of current energy policies is going to be a bit mashed-together itself.
These observations do not make for a bad book, as it may not be possible to write a "good" book that describes so many current, overlapping and confusing trends. Taking this positive perspective as a starting point, I will say that Yergin does a great job at summarizing many complex issues clearly and without noticeable faults or bias. You can hear the voice of a man (and a large consultancy) that has worked for decades on all three frontiers of energy: conventional, innovative and fantastical.
Here are some notes I took while reading:
- Yergin describes several missed opportunities on energy policy. Kyoto (1994) could have brought in emissions caps for LDCs, but that topic was verboten. Years later, it's even harder to raise the issue with countries that have shot way beyond the "stretch" targets debated in the 1990s.
- Cheney and Bush (like Reagan before them) really killed international momentum for agreements.
- Nuclear power also had several "bad luck" events (Three Mile Island, Chernobyl, Fukushima Daiichi) that damned a good technology.
- It's not just sad to see international disagreements on "save ourselves" issues; it's sad to see them fail for the same reasons. The most common is a reluctance to increase the price of energy that's seen as a cheap way to get economic growth and political stability. The first is not true (cheap energy is used -- wasted -- instead of other inputs or techniques). The second is short-lived and short-term, since voters with cheap energy habits take it for granted and increase their exposure to future supply shocks. Then you need to consider the negative feedback loop from climate change.
- In both of his books, Yergin borrows Churchill's definition of energy security: many suppliers. This definition still makes sense, even as America defies it with friend/foe diplomatic policies towards oil producing countries that seem similar. It's hard to see why Iran is an enemy if Saudi Arabia is a friend, just as it's strange to see the US importing so much oil from Nigeria, Venezuela and Russia. Are we interested in liberty and justice or cheap oil?
- Hubbert (of "Peak Oil" fame) was a good geophysicist but poor economist. He missed the impact of incentives and innovation on the "economic" supply of oil.
- Canada's government helped develop the oil sands, but I'm not going to believe the government was either necessary or sufficient. Oil sands -- like horizontal drilling and fracking -- would be developed when profits made it useful. Government spending may have sped up development, but it's not clear if more speed was good for industry, the environment, citizens or consumers. ("Cheap energy" is not all win-win.)
- The OECD established the International Energy Agency after the 1970s oil shocks to defend consuming countries against OPEC and other producers. It's a pity that the OECD cannot devote 10 percent of IEA resources to an International Water Agency, as water flows -- real and virtual -- are getting pretty important.
- The natural gas revolution got started in 1978, when the Carter government deregulated gas prices.
- The deregulation of California's wholesale electricity markets failed "by design," since fixed retail prices impeded the interaction of supply and demand.
- Japan's "top runner" energy efficiency regulation requires that ALL products sold x years from the present use as little energy as the most efficient product on the market today.