The New Map: Energy, Climate, and the Clash of Nations, Yergin - B+

                    This book is an assessment of today's "dramatic shifts of geopolitics and energy." The focus is on the big three, the US, Russia and Saudi Arabia. In America, the shale revolution has made the US an energy exporter and has provided a material financial advantage for our economy. Russia remains an energy superpower, but continues to struggle with the dissolution of the USSR and is losing some of its gas supply leverage over Europe. For the Saudis, the decline in oil prices in the last decade has led to efforts to diversify its economy.  For all, the move to a zero carbon society presents an overwhelming challenge.

                   The first successful horizontally fracked gas well was completed north of Dallas in 1998.  The ensuing glut of gas led to a reduction in coal usage and consideration of exporting the newfound asset. One enterprising Texas company, realizing that the glut in gas was severe, decided to look for oil through fracking. EOG was wildly successful. Soon, the Bakken field in N. Dakota and the Permian in west Texas were producing massive amounts of fracked oil. Texas alone was producing more oil than every OPEC country except Saudi Arabia. By 2019, the shale revolution was supporting 2.8 million US jobs. "The shale revolution has dramatically improved the competitive position of the US in the world economy." We now are exporting liquid natural gas (LNG) by ship around the world and natural gas to Mexico by pipeline. Most importantly though is the fact that we are once again a net exporter of oil. In February, 2020, we were producing 13M bpd, three times the amount in 2008. A massive trade imbalance has been reversed. The US now exports oil and gas to Europe, China and Japan. 

                 Over the last 20 years, control of Russia's energy has been at the core of Putin's agenda to restore the country. Oil production peaked at 11.4M bd a few years ago and the country has substantially benefitted from the relative price stability (notwithstanding the 2014 price collapse) of the past two decades. It is in the arena of natural gas and LNG supply that Russia is currently carving out its energy future. Russia supplies Europe with a third of its natural gas, most of which passes through Ukrainian pipelines. Russia built the Nord Stream pipeline, which runs under the Baltic Sea, in order to circumvent Ukraine's control of the pipelines. US sanctions halted the completion of Nord Stream 2. Most western Europeans view transacting with the Russians as a commercial, non-political matter. Those Europeans who were occupied by the USSR feel differently. Europe's natural gas industry has been deregulated and market forces now appear to be controlling supply and demand. The Russians are also exporting LNG to Europe, and most importantly, China. Russia has also implemented a three decade, $400B natural gas supply deal with China, which  has prepaid $80B  for oil to be delivered at a later date. The once communist rivals are clearly energy partners and strategic partners as well.

                   Today, China consumes 25% of the world's energy. Its oil imports come from the Middle East, through the Strait of Malacca, a source of considerable anxiety as the US Navy could easily interdict their lifeline. Concern about protecting its oil is what has led to the aggressive actions China has taken staking its claims in the South China Sea. China's BRI has many strategic objectives, and securing an overland energy supply is one of them.

                    The most compelling problem in the Middle East is the ongoing confrontation between revolutionary Shia Persian Iran and the cautious monarchy of Sunni Saudi Arabia. Iran has built an arc of Shiite power and influence stretching through  northern Iraq and Syria into Lebanon. In essence, they have extended their revolution abroad. Iran and Saudi's proxies are currently fighting to a stalemate and totally destabilizing Yemen, on Saudi's southern border.  Notwithstanding Saudi Arabia's challenges from Iran and its own desires to diversify away from oil dependence, it will for a very long time benefit from the fact that it has massive reserves and is the lowest-cost producer.

                   The convergence of electric cars, ride-hailing services and self-driving cars will change the demand for petroleum in the future and lead to major industrial and geopolitical disruptions. Solar and wind are changing the way energy is delivered. There is a new focus on carbon free nuclear, research into hydrogen propulsion and carbon capture and use. "In the years ahead, carbon dioxide and greenhouse gas policies will bring continuing changes in how energy is produced, transported and consumed.." The developing world's demand for electricity is going to slow the industrial world's movement toward a carbon-free planet. The creation of a new infrastructure for battery development and the construction of wind turbines will bring a new set of challenges. The transportation consumption of oil is not limited to cars and light trucks, but also includes trains, heavy trucks, ships and planes, none of which are on the threshold of major change. Oil demand will peak in the next decade or so and then begin a gradual decline. Nonetheless, billions will continue to be needed for investments to maintain oil and gas supplies into the future.  The Covid-19 crisis has stalled world growth and likely set us back a decade, in addition to throwing into doubt many of the precepts our globalized world is built upon. 

                      "Yet the notion of a fast track to a wholesale energy transition runs up against major obstacles - the sheer scale of the energy system that supports the world economy, the need for reliability, the demand of resources for renewables, and the disruptions and conflicts that would result from speed." Oil will maintain its position as the fuel that makes the "world go around." Policies and technology will determine the future.