The New (Electric) Map
Maps are meant to organize, order, and explain. They are guides, giving us direction in an uncertain territory. It might be logical to expect this book to provide an orderly perspective on the energy landscape. Instead, if offers a potpourri of power in different forms (geopolitics, energy, and economics).
As Adam Tooze observes in the New York Times, "What Yergin offers us is not one map, but an overview of the many maps contending for influence in the world today...The saga of entrepreneurship, great power politics, the climate crisis, the tech economy — any one of these could have provided an organizing frame, but Yergin never commits."
Yergin's book may be an overstuffed saga---a jarring collage of geopolitical musings and energy anecdotes---but its concluding sections, "Roadmap" and "Climate Map," are its saving grace. In "Roadmap," Yergin skillfully synthesizes the origins of "Auto-Tech" including the EV industry (Tesla), autonomous vehicles, and ride hailing (Uber). More importantly, he connects their stories to the wider energy narrative:
"Altogether, the world of autos---and their fuel suppliers---has become the arena for a new kind of competition. It is no longer just about selling cars to consumers for personal use. No longer just automakers versus automakers, no longer gasoline brands versus gasoline brands. It has become multidimensional. Gasoline-powered cars versus mobility services. And people-operated cars versus robotic driverless cars. The result is a battle among technologies and business models, and a struggle for market share."
In his "Climate Map," Yergin covers energy transitions and the renewable landscape, and three overarching points stand out:
1- The "energy transition” is defining the discussion about the future of energy and the bandwagon is growing. Energy companies are increasingly promising to go “net zero carbon,” major financial institutions are evaluating investments in terms of climate risk and divesting from fossil fuels, and auto makers are going all-electric.
2- While history shows that energy transitions don’t happen quickly, the past cannot compare to the present. Simply put, economics and efficiency drove the energy transitions of the past---whereas an unparalleled combination of money, activism, clean technology and government policy are driving today's.
3- The New "All-of-the-Above" Energy Strategy: While "All-of-the-Above" was cutting edge in 2012, the goal of net carbon zero by 2050 will demand much more than a mere diversity of fuel sources. In fact, it will require breakthroughs in materials science and advances in carbon capture and hydrogen fuel---not to mention innovations in other technologies, including digitization and artificial intelligence.
The bottom line in the changing energy mix is this: Electrification is advancing and the real question is how oil and gas companies will adapt. Yergin asks "to what degree will [they] be moving into electric power?" The answer is they already are, though that raises a whole new set of questions. For instance, electric utilities "generally operate in highly-regulated markets and deliver lower rates of return than those traditionally of oil and gas projects. How will they square the circle with demands for returns for investors...and yet deliver an increasingly 'green' portfolio for activist shareholders and millennial investors interested in 'impact'?"
Alas, there are no clear answers. Yergin admits that the new map of energy "hardly assures us a straight line" and that "disruptions will with some frequency inevitably redirect the path." Ultimately, it seems this book is less a map of the energy landscape, and more of a meditation on it.
This article is adapted, in part, from Daniel Yergin’s book, “The New Map: Energy, Climate and the Clash of Nations.”