No other public policy issue is so critical yet as nuanced and poorly understood as energy. This makes Yergin’s attempt in The Quest to guide nonexpert readers through the energy maze a worthy one.
Yergin examines how global energy demand will be met in an era which, despite the current slowdown, promises unprecedented economic growth. In a hype-free manner, he covers almost every form of energy. He describes the fundamentals of supply and demand, the challenges facing the oil industry and the electric power sector, and the dilemmas they face in light of the changing geopolitical landscape and the growing political pressure to reduce greenhouse gas emissions.
Yergin’s outlook on energy echoes the mainstream thinking of the petroleum industry. He is not worried the world is running out of oil and has great faith in nonconventional oil and natural gas, particularly the promising but controversial shale gas. His treatment of potential competitors to oil in the transportation fuel market (whether liquid, gaseous, or electric) as well as of renewable sources of electricity ranges between cautious optimism and gentle skepticism.
Oil’s status as a strategic commodity derives from its virtual monopoly as fuel for transportation. Policies that either increase oil supply or curb demand will not reduce oil’s strategic importance and are easy for the members of the Organization of Petroleum Exporting Countries (OPEC) to counteract by throttling down their own supply. The fivefold rise in oil prices of the past decade is, according to Yergin, mainly a result of demand shock emanating from developing Asia. At the same time, OPEC, which controls 79 percent of the world’s conventional oil reserves, has barely increased its production capacity compared to what it produced thirty years ago and is oddly exempted from responsibility by Yergin.
But despite this omission, Yergin’s panoramic book is one of great importance. The global energy landscape is evolving rapidly. Very few could have predicted a few years ago that the state of North Dakota would become America’s fourth largest oil producer, that China would become the world’s largest energy consumer, or that the discovery of vast hydrocarbon resources in the Eastern Mediterranean would turn energy-poor countries like Israel and Cyprus into important players in the world’s natural gas market. All of these unpredictable changes demonstrate the importance of books such as Yergin’s and that the quest for new energy resources will continue to be one of humanity’s prime preoccupations.
