Daniel Yergin

Ensuring Energy Security

On the eve of World War I, First Lord of the Admiralty Winston Churchill made a historic decision: to shift the power source of the British navy’s ships from coal to oil. He intended to make the fleet faster than its German counterpart. But the switch also meant that the Royal Navy would rely not on coal from Wales but on insecure oil supplies from what was then Persia. Energy security thus became a question of national strategy. Churchill’s answer? “Safety and certainty in oil,” he said, “lie in variety and variety alone.” Since Churchill’s decision, energy security has repeatedly emerged as an issue of great importance, and it is so once again today. But the subject now needs to be rethought, for what has been the paradigm of energy security for the past three decades is too limited and must be expanded to include many new factors. Moreover, it must be recognized that energy security does not stand by itself but is lodged in the larger relations among nations and how they interact with one another. Energy security will be the number one topic on the agenda when the group of eight highly industrialized countries (g-8) meets in St. Petersburg in July.The renewed focus on energy security is driven in part by an exceedingly tight oil market and by high oil prices, which have doubled over the past three years. But it is also fueled by the threat of terrorism, instability in some exporting nations, a nationalist backlash, fears of a scramble for supplies, geopolitical rivalries, and countries’ fundamental need for energy to power their economic growth.

The commanding heights : the battle between government and the marketplace that is remaking the modern world

Taking a worldwide perspective, including that of Britain (where the process began under Margaret Thatcher), Europe, the former USSR, China, Latin America and the USA, this is a study of the redefinition of the relationship between state and marketplace. This is the process known as privatization - a term which inadequately expresses the phenomenons far-reaching changes. The authors set out to show how a revolution in ideas is transforming the world economy and to explain why it is happening, how it can go wrong, and what it will mean for the global economy at the dawn of the 21st century.

Fueling Asia's Recovery

The financial contagion sweeping through Asia is forcing a re assessment of the continents future, including assumptions about energy?the lifeblood of economics and a critical factor in the geopol itics of the region. In recent decades, Asias rapid economic growth has meant even more rapid increases in the consumption of energy. A failure to satisfy its enormous needs, it was thought, would undermine the Asian economic miracle. But now that miracle is on hold, further complicating the already tangled interaction between energy, economics, and politics. While the recent economic downturn may alleviate some of these demand pressures for now, an inability to satisfy Asias hunger for energy over the longer term will raise new risks and even dangers. But the solution to its potential energy insecurity is not simply a matter of applying the traditional government-based solutions?resource management and diplomacy. This problem can only be solved by ac celerating the trend toward market-based energy strategies. Supplying energy to Asia has never been a simple task. Indeed, the phenomenal economic growth most East and Southeast Asian countries experienced over the recent decades has been doubly miraculous since it occurred despite severely limited energy resources in

Energy: an emergency telescoped

This article reviews the story of oil price increases and their proximate causes during the years 1974-1979. The social and political consequences of rapid development in the OPEC countries during these years pushed these nations to reevaluate their development plans and hence their need for revenue. The influence of politics on the oil-price increases is discussed in relation to the two largest producers of oil - Saudi Arabia and Iran. In the latter part of this article, the focus shifts to the US and its record in reducing Americas dependence on imported oil and in developing a coherent national energy program. Finally, the domestic conventional sources of energy that are the most obvious alternatives to imported oil are discussed: oil, gas, nuclear power and coal. The need to focus on renewable energy sources as well as on energy conservation in general is emphasized. (KRM)

Energy Future: Report of the Energy Project at the Harvard Business School@@@The Last Chance Energy Book

Given the steady stream of analyses of the “energy crisis” and the debates that they regularly inspire, it is becoming as important to observe who is speaking as what is being said. The present bold volume merits wide attention on both counts. Capping a six-year study of all major aspects of U.S. energy policy, this report gives a comprehensive diagnosis of our energy ills as well as a prescription for treating them over the next twenty years. The authors (a group of seven with varied backgrounds) have the qualifications necessary to tackle as they do the economic, technological, environmental, political, and social complexities which comprise essential threads of this endlessly complicated pattern.

Toward a balanced energy program

Conservation and solar energy emerge as the preferred choices for a balanced national energy program in a Harvard Business School Energy Project report. Conflicting interests and battles over price controls, income distribution, corporate structures, and calculations based on pre-1973 data have obscured the issues of determining the best ways to develop domestic energy resources. After reviewing the outlook for domestic oil and gas, the external costs of coal and nuclear, and the problems of importing oil, the report favors reliance on a corrected marketplace as a politically acceptable solution. Financial incentives to promote conservation and solar energy will give these two options a fair chance to compete with conventional fuels. A program of appropriate incentives is outlined and the case made for government leadership. A balanced program would continue present levels of conventional fuel development, but would divert the resources and effort for any major increments of energy from these fuels to increase the energy contributions of conservation to eight percent and solar from one to four percent of the total energy mix.