Posts Tagged ‘Daniel Yergin’


Yet the proposed 5 Year OCS leasing program (p. 3) tells us that long term offshore production is not needed because the IEA’s “roadmap to net-zero emissions by 2050 for the global energy sector would require no new investment in fossil fuel supply projects (IEA 2021).”

Does the IEA dictate US energy policy? Dan Yergin has a far better grasp on the realities of energy consumption and transitions.

Oil, discovered in 1859, did not surpass coal as the world’s primary energy source until the 1960s, yet today the world uses almost three times as much coal as it did in the ’60s.

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Some quotes that I found particularly interesting in Dan Yergin’s Forbes Interview:

We don’t have a physical shortage of natural gas in the U.S., we have a shortage of pipelines. It’s very hard to get any new major pipelines done. In fact, it’s somewhere between very hard, and impossible.

Some of the assumptions about how easy things would be [related to the energy transition] are turning out to not have been correct. I think there is some reassessment of ESG [Environmental, Social, and Governance investment] going on, and at the same time, many investors also want good returns. Therefore, they’re looking at the oil and gas sector in a way they weren’t looking at it a year ago.”

With regard to concerns about US government policy panic: “For instance, a ban on oil exports. First of all, if you banned product exports, it would actually send gasoline prices higher…. If limits were put on LNG exports, it would be a terrible shock to Western unity and Europe’s ability to stay the course.”

On Saudi Arabia: I think the old relationship with the U.S. is over. China is the main, critical market for the Kingdom now….The Crown Prince has said that he wants Saudi Arabia’s Sovereign Wealth Fund to be the biggest in the world, and it is probably on the way to being that. He sees Saudi Arabia becoming very influential in the world’s economy, not only as an oil producer, but as a financial player.”

“The likelihood that there will be new Iranian oil coming onto the market is increasingly unlikely

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Technological advances, most notably horizontal drilling and hydraulic fracturing, and private initiative on private land changed all of that.

“The US is going to emerge this year as the world’s largest LNG exporter, and it is clear that US LNG is a geopolitical asset for the United States and for Europe.”

Daniel Yergin

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  • While the text of the announcement implies otherwise, the new name prioritizes the “transition” over concerns about energy supply, security, and reliability. In that regard, the timing seems questionable.
  • Why not the North Sea Energy Authority (NSEA) or UK Offshore Energy Authority (UKOEA)?
  • Will OPEC+ be impressed? Perhaps China will add a few coal-fired power plants in honor of the name change.
  • Dan Yergin understands that energy transitions are complicated. Quoting Yergin’s outstanding article in the Atlantic:

The term energy transition somehow sounds like it is a well-lubricated slide from one reality to another. In fact, it will be far more complex: Throughout history, energy transitions have been difficult, and this one is even more challenging than any previous shift.

The 19th century is known as the “century of coal,” but, as the technology scholar Vaclav Smil has noted, not until the beginning of the 20th century did coal actually overtake wood as the world’s No. 1 energy source. Moreover, past energy transitions have also been “energy additions”—one source atop another. Oil, discovered in 1859, did not surpass coal as the world’s primary energy source until the 1960s, yet today the world uses almost three times as much coal as it did in the ’60s.

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Contrary to the opinion of some, opponents of offshore oil and gas leasing are not rigid zealots who are unwilling to compromise. More than 80 such organizations have graciously voiced support for a novel five year leasing plan:

In accordance with OCSLA, we urge you to create a new five-year lease plan that includes no new offshore lease sales for the next five years.

Letter to President Biden and Secretary Haaland

That’s right – a leasing plan with no leasing, a program that is about nothing.

Seinfeld on Twitter: ""The show is about nothing!" #Seinfeld  #GeorgeCostanza http://t.co/6eQoZeJLxG" / Twitter

Unfortunately for the proponents, this creative proposal would seem to have some significant legal obstacles, most notably its inconsistency with the statute and the legislative history. The idea was to have an organized approach to leasing, not to eliminate it. Per OCSLA:

The leasing program shall consist of a schedule of proposed lease sales indicating, as precisely as possible, the size, timing, and location of leasing activity which he determines will best meet national energy needs for the five-year period following its approval or reapproval. 

OCS Lands Act

How does zero leasing help meet national energy needs? Security? Price stability? Supply chain? Are these groups funded by OPEC+ members and nations that hate us the most? If not, they should be, because they are certainly doing their bidding.

As Daniel Yergin’s excellent Atlantic piece explained, the energy transition will take time and be enormously complex. He quoted French economist Jean Pisani-Ferry who warned that “going into overdrive on transitioning away from fossil fuels would lead to major economic shocks similar to the oil crises that rocked the global economy in the 1970s.”

Empty five year leasing programs are not an option for a diverse nation of 330+ million people that will continue to need oil and gas well into the future. We should and are adding new energy alternatives to the mix, and many of us were involved in developing the framework for these alternatives, but eliminating important sources of oil and gas at this time would be sheer folly.

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