The Quest - By Daniel Yergin Page 0,2

to drive up the price of oil and, in so doing, “bankrupt” the West. The region also confronts the turmoil arising from the dissatisfaction of a huge bulge of young people for whom education and employment opportunities are lacking and whose expectations are far from being met.

There are many other kinds of risks and dangers. It is an imperative to anticipate them, prepare for them, and ensure the resilience to respond—so as not to have to conclude after the fact, in the stark words of a Japanese government report on the Fukushima Daiichi disaster, that “consistent preparation” was “insufficient.”

In terms of the environment, the third theme, the enormous strides have been made to address traditional pollution concerns. But when people in earlier decades focused on pollutants coming out of the tailpipe, they were thinking about smog, not about CO2 and global warming. Environmental consciousness has expanded massively since the first Earth Day in 1970. In this century climate change has become a dominant political issue and central to the future of energy. This shift has turned greenhouse gases into a potent rationale for rolling back the supremacy of hydrocarbons and for expanding the role of renewables.

Yet most forecasts show that much of what will be the much larger energy needs two decades from now—75 to 80 percent—are currently on track to be met as they are today, from oil, gas, and coal, although used more efficiently. Or will the world shift toward what Lord Kelvin thought was needed and Admiral Rickover doubted was possible—a new age of energy, a radically different mix that relies much more heavily on renewables and alternatives—wind, solar, and biofuels, among others—perhaps even from sources that we cannot identify today? What kind of energy mix will meet the world’s energy needs without crisis and confrontation?

Whatever the answers, innovation will be critical. Perhaps not surprisingly, the emphasis on innovation across the energy spectrum is greater than ever before. That increases the likelihood of seeing the benefits from what General Georges Doriot, the founder of modern venture-capital investing, called “applied science” being successfully applied to energy.

The lead times may be long owing to the scale and complexity of the vast system that supplies energy, but if this is to be an era of energy transition, then the $6 trillion global energy market is “contestable.” That is, it is up for grabs among the incumbents—the oil, gas, and coal companies that supply the bulk of today’s energy—and the new entrants—such as wind, solar, and biofuels—that want to capture a growing share of those dollars. A transition on this scale, if it does happen, has great significance for emissions, for the wider economy, for geopolitics, and for the position of nations.

The first section of this book describes the new, more complex world of oil that has emerged in the decades since the Gulf War. The essential drama of oil—the struggle for access, the battle for control, the geopolitics that shape it—will continue to be a decisive factor for our changing world. China, which two decades ago hardly figured in the global energy equation, is central to this new world. This is true not only because it is the manufacturing “workshop of the world,” but also because of the “build-out of China”—the massive national construction project that is accommodating the 20 million people who are moving each year from rural areas into cities.

Part II centers on energy security and the future of supply. Will the world “run out” of oil? If not, where will it come from? The new supply will include natural gas, with its growing importance for the global economy. The rapid expansion of liquefied natural gas is creating another global energy market. Shale gas, the biggest energy innovation since the start of the new century, has turned what was an imminent shortage in the United States into what may be a hundred-year supply and may do the same elsewhere in the world. It is dramatically changing the competitive positions for everything from nuclear energy to wind power. It has also stoked, in a remarkably short time, a new environmental debate.

Part III is about the age of electricity. Ever since Thomas Edison fired up his power station in Lower Manhattan, the world has become progressively more electrified. In the developed world, electricity is taken for granted and yet the world cannot operate without it. For developing countries, shortages of electricity take their toll on people’s lives and on economic growth.

Today, a host of new devices and gadgets that did