Book Review: ‘The New Map’ by Daniel Yergin
This week Nexus PMG reviews a compelling new book: The New Map: Energy, Climate, and the Clash of Nations by Daniel Yergin.
Yergin won the Pulitzer Prize for his 1992 book The Prize: The Epic Quest for Oil, Money and Power and is considered the unofficial biographer of the oil and gas industry. In The Prize, Yergin described how the discovery and commercialization of oil transformed the world, enabling people to travel farther, faster and more cheaply. It helped power the next phase of the industrial revolution, giving countries and corporations that had it a sustainable competitive advantage. Oil also set up a decades-long struggle for access to the commodity that continues to this day.
Yergin is a master at bringing readers into the critical moments where momentous events changed history. We share the wildcatters’ excitement that first found oil at Spindletop in Texas in 1901. We comprehend the gravity of Winston Churchill’s decision to change the Royal Navy’s fuel source from coal to oil. We then see the stunning chain of events that follow, making winners—or targets—out of countries that had oil resources while marginalizing countries that didn’t.
In The New Map, Yergin tells of the continued impact of technology (fracking) that vaulted the United States into the number one position in the oil production league tables, spurring a new round of conflict with the Russians and Saudis who saw their biggest customer go away. He also goes into detail on the drawn-out cold war that is emerging between China and the United States over the global geopolitical influence that is turning many proud sovereign nations into pawns in this larger battle.
We learn how China is using infrastructure investment dollars through its massive Belt and Road Initiative to gain influence all over the developing world. Meanwhile, Russia is weaponizing its oil and gas resources by switching off gas supplies to Eastern Europe in a bid to gain leverage.
We hear of Europe’s attempts to reduce its dependency on Russian energy all while supporting the Nord Stream 2 pipeline that would bring natural gas from Russia under the Baltic Sea to Germany. Yergin also describes the societal damage that oil-rich countries often inflict on themselves as money-hungry dictators in countries like Venezuela, Syria, and Russia rob their countries blind and leave their citizens with the bill.
But Yergin is also mindful of the powerful impact of technology and changes in social norms. He brings us into the lunch meeting where Elon Musk heard a pitch about electric airplanes and pivoted the conversation into the formation of electric car maker Tesla. We hear about the frustrations with taxicab companies that pushed Garrett Camp to invite his buddy Travis Kalanick to a brainstorming session that created the dominant ridesharing service Uber.
These stories are in the context of the big changes that are threatening the supremacy of the oil economy, including changing social behaviors and the drive to combat climate change. Millennials are foregoing driver’s licenses in favor of hailing Ubers and Lyfts from their phones. Electric vehicles are the fastest growing automotive segment, displacing the gasoline-hungry internal combustion engine.
Climate change emerges as the next biggest threat to the oil economy. Yergin traces the growth of wind and solar technology and the integration of renewables into electric grids all over the world. But he’s cautious about calling for an aggressive and immediate switch to clean power. In Yergin’s calculus, oil and gas are simply too embedded into our energy infrastructure to be easily replaced. Solar and wind are less efficient intermittent non-baseload sources of energy, and battery storage technology is not yet capable of shifting much more than three hours per day of energy. In other words, clean energy is expensive and hard.
But Yergin spends practically no time in the book envisioning a world that is 2-3 degrees hotter on average than it is now. He doesn’t talk about the damaging storms, flooded cities, increased wildfires, forced migration, and fights over clean drinking water that may happen in a world where we don’t contain carbon emissions. In Yergin’s mind, it seems that wind and solar developers are just another competitive force in the energy market.
In his defense, a clean energy economy is indeed very hard to achieve primarily because of the long-term habits we’ve all adopted based on cheap and ubiquitous oil. Yergin points us to research that he himself did with ex-US Energy Secretary Ernie Moniz that detail specific recommendations on how to innovate with clean energy. In some ways, these recommendations, which are not part of The New Map, are as powerful as the grand geopolitical narrative in his books as Yergin and Moniz lay out a pathway to align government and private sector players along specific policies and programs that will accelerate a clean energy transition. Yergin also did a commendable job of editing this book, which was clearly years in the making, for the far-reaching repercussions of COVID-19 which may have hastened the arrival of peak global oil demand.
Yergin is a great storyteller with an impressive knack for uncovering stunning connections hidden in sweeping tales of industry and geopolitical history. The 20th century was, in fact, deeply shaped by the discovery and commercialization of oil and gas. This is something we should all understand if only for one simple fact: it’s all about to unravel.
Oil’s dominance is waning and the emergence of the new technologies that will replace it will cause revolutions similar in size and scale to the ones that transformed the last 100 years. The geopolitical leverage that the shale revolution gave the United States, who became less reliant upon imported oil, will also be replicated as we switch to homegrown renewables. New alliances will be formed while the old guard will be forced to scramble to keep oil-dependent economies afloat. Reading Yergin’s impressive histories of oil’s dominant impact on the last 100 years could shed light on what is going to happen in the next 100.
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