Big oil companies have pledged to spend fortunes on wind and solar power. An electric car company that did not exist 20 years ago has been valued at more than Ford and General Motors combined. Spending on renewables is next year set to outstrip oil drilling for the first time ever.
The direction of travel in the global energy system seems clear: a historic shift away from the fossil fuels that have shaped the fate of nations for more than a century is under way.
Who better to chart it than Daniel Yergin, the prizewinning American author and energy expert whose advice is sought by ministers and chief executives worldwide? And bang on time, Yergin has written what looks like the book for this moment: The New Map.
Alas, it does not quite deliver. Its opening pages promise to sweep the reader through the flashpoints of recent geopolitical history and the role energy has played in them, before moving on to climate change and how the brown-to-green energy transition might play out.
The first part of this story is deftly told, starting in the US with the pioneers who beat considerable odds to find a way to extract oil and gas from underground rocks known as shale. Yergin writes with the flair for dramatic detail that helped him win a 1992 Pulitzer for The Prize, a magisterial history of the oil industry.
“OK but sad,” his new book reports George Mitchell writing in the mid-1990s when, facing financial strains from his efforts to crack shale extraction, he sold a suburban real estate project in Texas on which he had lavished much attention. The setback was temporary. The fracking techniques that Mitchell and others eventually mastered triggered the shale revolution, a leap in output that saw the US surge past Russia and Saudi Arabia to become the world’s biggest producer of oil and gas, and a leading exporter of both.
This put in sight the energy independence that US leaders had craved for decades, and upended the geopolitics of the trade in resources. One example is the sanctions on Iranian oil exports and finance applied in 2012 to force Tehran to the negotiating table on a nuclear deal. Before shale, it was far from obvious that such penalties would work, Yergin writes. Price rises from a shortfall in global supplies might have hit oil-importing nations, causing sanctions to unravel. Yet they held as rising US production offset the drop in exports from Iran, which eventually agreed to constrain its nuclear programme. Another example is how US exports of liquefied natural gas helped to lower European reliance on gas from Russia.
Readers of The Quest, Yergin’s 2011 follow-up to The Prize, will find some of the new book’s terrain familiar. A little too familiar in parts. Many of the companies and characters we meet in The Quest, such as George Mitchell and Devon Energy, the Oklahoma group that eventually bought his company, make a reappearance in The New Map.
There is, nonetheless, much to admire elsewhere. In chapters on China, the Middle East and Russia, Yergin offers sprightly insights for any general reader seeking to understand tensions in the South China Sea and the strife-torn Middle East or the background to Vladimir Putin’s efforts to restore Russia to great power status. The role of oil and gas remains a central theme throughout.
Yet readers keen to learn about the impact of climate change and the energy transition must wait until well after the book’s halfway mark. There is a diligent summary of the history of the electric car. The plummeting cost of solar panels is covered too, along with the rising public — and investor — clamour for greater climate action.
But anyone hoping to read about solar power’s answer to George Mitchell, or about the people shaping the multibillion-dollar offshore wind industry, or the oil chief executives trying to drag their companies into the renewable energy business will be disappointed.
Yergin is no climate sceptic. He plays down some of the environmental impacts of fossil fuels, but he does not ignore them. Nor is he hostile to renewables. Ultimately though, he is convinced of the “ineluctable reality” of an energy system that is today more than 80 per cent based on oil, gas and coal.
The energy transition has, he adds, so far been more of an energy addition: wind and solar have been growing but on top of fossil fuels, which have also been increasing, not least in emerging markets. Flight shaming may be big in Sweden, but China has been building eight new airports a year — or was before the coronavirus pandemic hit.
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He acknowledges the idea that the virus might inspire a “green” recovery that could accelerate an energy shift. But he is unconvinced that this will definitely happen, especially considering the “staggering amounts of debt” governments have taken on to fight Covid-19.
Whether he is right or not, one thing is clear. The foundations of the global energy system have shifted; it is hard to imagine a reversal and the book that explains who was responsible, how they did it and what happens next is still waiting to be written.
The New Map: Energy, Climate and the Clash of Nations, by Daniel Yergin, Allen Lane, RRP£25/Penguin Press, RRP$38, 512 pages
Pilita Clark is an FT columnist
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