National Capital Area Chapter

Dan Yergin Keynotes National Capital Area Chapter Annual Dinner

Phillip Brown

Specialist in Energy Policy

Congressional Research Service (Washington, DC)






Disclaimer: The views presented herein are those of the authors [and/or speaker] and are not presented as those of the Congressional Research Service or the Library of Congress.


On February 13, 2013, approximately 150 energy professionals gathered at the University Club in Washington, DC to hear Daniel Yergin keynote the National Capital Area Chapter (NCAC) annual dinner, the largest attendance in the chapter’s history. Dr. Yergin’s speech centered on his most recent book, The Quest: Energy, Security, and the Remaking of the Modern World, and attendees were treated to a candid Q&A session as well as a book signing with the Pulitzer Prize-winning author.


During the week of the NCAC dinner, Washington, D.C. schedules were jam packed with energy economics and policy events in both the legislative and executive branches of government, as well as other events organized by various entities in the D.C. area. The Senate Committee on Energy and Natural Resources held a hearing titled “Opportunities and Challenges for Natural Gas” and a large portion of the hearing was spent discussing items related to how LNG exports might affect natural gas markets and industrial natural gas consumers.1 On the following day, the Center for Strategic and International Studies (CSIS) hosted Senate Energy Committee Chairman Ron Wyden and ranking member Lisa Murkowski at an event to launch the CSIS report “Realizing the Potential of U.S. Unconventional Natural Gas.”2 The House of Representatives also saw energy policy action during the week, with the House Science and Technology Committee holding a hearing titled “American Energy Outlook: Technology, Market, and Policy Drivers,” which included testimony by long-time NCAC member and EIA Administrator Adam Sieminski.3

On February 12th President Barack Obama delivered the 2013 State of the Union address, which included references to various U.S. energy policy objectives. In fact, the President began his energy discussion by stating “no area holds more promise than our investments in American energy.”4 President Obama highlighted increased U.S. oil and gas production, improved vehicle efficiency, renewable electricity generation growth, and reduced carbon emissions over the last four years. Additionally, the President presented a number of energy policy objectives, to include accelerating federal oil and gas permits as well as creating an Energy Security Trust that would fund efforts to “shift our cars and trucks off oil for good.”5 Environmental concerns were also a central theme in the State of the Union address and the President called on Congress to pursue a “market-based solution to climate change.”6 The President indicated that if Congress does not act on climate change issues, he will direct his administration to develop executive actions that will reduce pollution, prepare communities for climate change consequences, and “speed the transition to more sustainable sources of energy.”7

The Quest: Dan Yergin Speaks to NCAC

One day after the 2013 State of the Union address, Dan Yergin spoke to NCAC members and guests about his book The Quest as well as recent energy market developments and trends. Dr. Yergin covered a wide range of topics during his talk including technology development and evolution, forces of change in global energy markets, and the fascinating people and personalities that have shaped and influenced the energy industry. Although by no means all-inclusive and comprehensive, some highlights of Dr. Yergin’s speech generally fall into one of four categories: (1) resource supply, (2) the future role of fossil fuels, (3) technology lead times, and (4) security threats to global energy markets.

Resource Supply

Fears of oil supply shortages have existed for more than 100 years. According to Dr. Yergin, on five separate occasions have experts predicted that the world would either imminently run out of oil or that oil resources would not be large enough to satisfy global demand. The first such documented prediction dates back to 1885 when the state geologist of Pennsylvania predicted inevitable production declines.8 The most recent prediction occurred in the early 2000’s as a result of the “peak oil” theory becoming a mainstream discussion topic, combined with the expectation of exponential oil demand growth in emerging economies.9 Figure 1 plots the dates for each of the five oil shortage predictions along with annual global oil production since 1857.

Figure 1: Global Crude Oil Production 1857 to 201110



As indicated in Figure 1, global oil production has continued to increase following each oil shortage prediction.  This upward production trajectory was made possible through improved understanding of the global oil resource endowment and also through the development and application of new technologies that allowed oil demand to be satisfied by expanded production and global trade.  The United States, once considered to be in perpetual oil production decline, might now be considered a poster child for increasing oil production through the use of advanced technologies.  According to Dr. Yergin, U.S. oil production is up 39% in recent years as a result of applying 3-dimensional seismic, hydraulic fracturing and horizontal drilling technologies to economically access crude oil in shale formations.  As a result, U.S. crude oil output levels continue to exceed projections.  Figure 2 shows monthly U.S. crude oil production from January 2006 to December 2012.

Figure 2: Monthly U.S. Crude Oil Production 2006 to 201211



Increased U.S. oil production is changing the domestic energy decision matrix. Due to refinery configurations, locations for tight oil development and the petroleum delivery infrastructure in the United States, the oil industry is considering the real possibility of U.S. oil exports; an option that would have been considered unthinkable just a few years ago.

Future of Fossil Fuels

According to Dr. Yergin, fossil fuels currently account for approximately 80% of global energy supply. New oil and gas production technologies, along with market forces, are unlocking fossil fuel resources that until recently were not considered economically recoverable, and abundant coal deposits are located in a number of global locations. Currently, global energy resources appear to be large enough to satisfy expected demand in the near to medium term. However, environmental effects of energy development, production, and use will likely impact the future of global energy markets. Carbon emissions and climate change are often major considerations that can directly affect current and future decisions about energy development and use. So what will the future energy mix look like? Dr. Yergin points out that the general consensus of global energy forecasts indicates that fossil energy sources will make up between 75% and 80% of the global energy mix in the 2035 to 2040 timeframe—nearly the same as they do today. Table 1 summarizes the projected global energy resource mix as forecasted by multiple sources.

Table 1: Global Energy Resource Mix Projections12


Forecasts over a 20-year time horizon are quite difficult to predict with any degree of accuracy. Changes in markets, technologies, geopolitics, or any of the myriad of factors that impact energy use can potentially change the global energy mix. In some instances, these changes can be dramatic and unforeseen.

Technology Lead Times

“Shale gas is the biggest technological change so far in energy of the 21st century,” Dr. Yergin stated during his speech. However, the roots of the shale gas revolution span decades as it took George Mitchell close to 20 years to lay the technology and process foundation for realizing increased amounts of U.S. shale gas production. The energy industry represents a rich history of technology innovation, development, and application. However, lead times for new energy technologies have, historically, been long. Dr. Yergin specifically mentioned Albert Einstein’s Nobel Prize-winning 1905 paper, Concerning an Heuristic Point of View Toward the Emission and Transformation of Light, which explains the photoelectric effect.13 Dr. Yergin noted that more than 100 years later solar photovoltaic power generation represents a very small portion of the global energy mix, although he noted that solar generation costs are declining and annual solar power installations throughout the world have recently experienced an upward trajectory.

Nevertheless, these two examples illustrate that the development and application of revolutionary technologies can take decades or even more than a century to realize. Furthermore, attempts to accelerate technology revolutions may have unknown consequences, economic and otherwise, given the current scale and inertia of the global energy supply and delivery system.

Security Threats

Whereas many concerns about the potential resiliency of the energy supply chain have centered on adequate access to resources and the availability of resources from politically challenging geo-locations, there are new dimensions that can potentially threaten energy supplies and create disruptive energy market imbalances. Dr. Yergin briefly discussed three of these dimensions: (1) cyber security, (2) physical security, and (3) integrated energy shocks.

First, cyber security has emerged as a potential threat to the broader economy with specific concerns about threats to critical energy infrastructure. On August 15, 2012, a cyber-attack on Saudi Aramco damaged some 30,000 computers with the goal of disrupting the flow of oil and gas to local and international markets.14 While the Saudi Aramco attack failed to disrupt energy supplies from the world’s largest oil exporter, the incident did reveal possible cyber vulnerabilities and the potential consequences of successful attacks. Global leaders have recognized the cyber threat. The World Economic Forum (WEF) has organized an initiative known as “Partnering for Cyber Resilience (PCR),” and cyber security received significant attention at the WEF annual Davos meeting.15 President Obama’s State of the Union 2013 speech also referenced the threat of cyber-attacks “to sabotage our power grid,” and the White House has issued an executive order that creates a framework to minimize the risk of cyber intrusion on critical infrastructure assets.16

Second, physical security of energy infrastructure is emerging as another risk to energy supply and delivery. On January 16, 2013, terrorists took more than 800 people hostage at a natural gas facility located near In Amenas, Algeria. Control of the facility was restored following a raid by Algerian Special Forces, although nearly 40 hostages were killed once the situation was resolved.17 In February of 2006, terrorists linked to al-Qaeda attempted to detonate explosives in order to damage and destroy portions of Saudi Aramco’s Abqaiq oil processing facility, one of the largest and most important processing facilities in the world.18 The attack was thwarted by Saudi security forces and procedures. Nevertheless, physical attacks on energy infrastructure illustrate the strategic nature of terrorist motivations, since energy supply disruptions and price volatility can potentially have global economic consequences.

Finally, integrated energy shocks from weather, earthquakes, and other natural disaster events can result in supply constraints and delivery of energy products. Hurricanes Katrina and Rita in 2005 disrupted oil and gas activities in the U.S. gulf coast and Hurricane Sandy in 2012 exposed potential resiliency issues with electric power systems. In March of 2011, the earthquake and tsunami that resulted in the Fukushima Daiichi nuclear accident rippled throughout the broader energy markets in terms of increased liquefied natural gas demand, increased emphasis on renewable electricity development, and the reconsideration of plans for nuclear power in many countries. Although, some analysts point out that the scale and integrated nature of the global energy market enabled Japan to shut down essentially its entire nuclear power fleet, while minimizing economic impacts and the delivery of energy services.19 More than two years later, the Fukushima nuclear accident is still affecting global energy markets.

The Future...

So, what does all of this mean for the future of global energy markets? Recent, and even longer-term, history indicates that no one actually knows, with any degree of certainty, what to expect with regard to the future of world energy. Dr. Yergin’s speech provided the audience with some interesting and insightful thoughts to consider with regards to the future of global energy markets. Some of the questions pondered by the author of this article include the following:

  • Is the world entering into an era of energy resource abundance? Technologies and market forces are unlocking vast amounts of energy resources that many analysts did not consider viable just a few years ago. As a result, resource scarcity is a less pressing issue with regard to its influence on policy-maker decisions. Rather, policymakers are now considering how to react to abundant energy supply, with the U.S. now considering the possibility of exporting oil and natural gas to global destinations. Additionally, policymakers may also be grappling with how reorientation of energy resources might change the geopolitics of energy and what countries are best positioned to take advantage of the resulting opportunities?
  • Are there new and emerging technologies that might change the energy market paradigm and dramatically affect the global energy mix? Shale gas technology has changed the outlook for world energy. Renewable energy technologies are expected to increase their penetration into global energy markets; however, most energy mix projections in the 2030-2040 timeframe forecast that fossil fuels will likely contribute 75% to 80% of the global energy mix, very close to their contribution today. Can technology development, policy or new and evolving business models change these forecasts and, if so, when might these changes occur?
  • How might countries balance greenhouse gas and other environmental policy objectives with the economics and inertia of the global energy system? Environmental and climate change concerns are influencing energy policy decisions throughout the world. However, achieving a rapid transition to a low-carbon energy market may be difficult due to cost, performance, and integration challenges associated with renewable energy and carbon capture and storage technologies. The transition is further complicated by the sheer scale, and expected growth, of the global energy market. Historically, time frames for energy transitions and technology development and commercialization lead times can be significant.
  • What mitigation strategies are necessary to reduce the risk of new and emerging threats to world energy markets? Cyber-security, physical security, energy shocks, and other threats are emerging as potentially significant risks to energy supply. As a result, governments, corporations, and global institutions will likely need to develop and implement cooperative action plans that ensure the resiliency of global energy markets.




(1) An archived hearing broadcast and copies of witness testimony is available on the Senate Energy and Natural Resources Committee website,

(2) A webcast of the event and a copy of the CSIS report are available at,

(3) An archived hearing broadcast and copies of witness testimony is available on the House Science and Technology Committee website,

(4) “The 2013 State of the Union,” delivered by President Barack Obama, available at

(5) Ibid.

(6) Ibid.

(7) Ibid.

(8) Yergin, D., The Quest: Energy, Security, and the Remaking of the Modern World, The Penguin Press, 2011.

(9) Ibid.

(10) Global oil production history from the Energy Information Administration. Dates and concerns about oil resource depletion from; Yergin, D., The Quest: Energy, Security, and the Remaking of the Modern World, The Penguin Press, 2011.

(11) Monthly oil production data from the Energy Information Administration.

(12) In order to normalize projections from EIA, BP, IEA, and Exxon, adjustments were made to the oil/liquids percentages so that biofuels were removed from that category and classified as “other.”

(13) A copy of Einstein’s 1905 paper is available at:

(14) Reuters, “Aramco Says Cyberattack Was Aimed at Production,” New York Times, December 9, 2012.

(15) “Partnering for Cyber Resilience: Risk and Responsibility in a Hyperconnected World – Principles and Guidelines,” World Economic Forum, March 2012.

(16) “Executive Order – Improving Critical Infrastructure Cybersecurity,” The White House, February 12, 2013, available at

(17) Zarroli, J., “Algeria Attack Raises Security Alarms For Energy Firms,” National Public Radio, January 22, 2013.

(18) Al-Rodhan, K., “The Impact of the Abqaiq Attack on Saudi Energy Security,” Center for Strategic and International Studies, February 27, 2006.

(19) Christof Ruhl, Group Chief Economist at BP, published a presentation where he stated the following: “I believe an objective look at the data shows that it is precisely the inter-dependence of the world’s energy system that is its real strength. Just imagine if Japan would have been truly self-sufficient, and not integrated into the global energy system at all – the adjustments we have seen would have been impossible.” See, “BP Statistical Review of World Energy 2012: Energy in 2011 – disruption and continuity,” BP, June 13, 2012.



Я не могу различить дна, но лежащие на "Скачать оперу на айфон"нем камни и колышущиеся водоросли вижу настолько отчетливо, как будто внизу устроена какая-то диковинная подсветка.

Если он не "Игры повар 2"ранен, пусть его доставят прямо ко мне.

спросил он, понаблюдав за игрой Тома "Скачать котуйскую историю"несколько минут.

У меня хватало проблем и "3d max 2008 скачать"без этого.

Койот, тяжело дыша, побежал дальше и, наконец, прибежал к месту, где отдыхали соколы.

Второе затянет так много сил, что разбудит "Бесплатные игры барби русалочка"любого из магических стражей, которых мама расставила вокруг зоны.

Click to view a printable version of this article.