The New Map
Energy transition and geopolitics; the demand risk facing an integrated major.
Summary
Yergin covers energy and geopolitics as of 2020, organised by region: the American shale revolution and its strategic consequences, Russia's energy relationship with Europe and its pivot to China, China's Belt and Road and its position in the South China Sea, the Middle East after the Arab uprisings and the Iran and Saudi confrontation, and the energy transition including electric vehicles, renewables and climate policy.
The central claim is that shale changed the map. American production growth removed the import dependence that had shaped United States Middle East policy for fifty years, turned the country into an exporter, weakened OPEC's pricing power, and gave Washington the ability to impose energy sanctions without harming itself. He traces the consequences through each region.
On transition, Yergin argues it will be slower and more contested than its advocates assume, because energy systems are enormous and long-lived, because oil and gas remain embedded in petrochemicals, shipping, aviation and industry, and because the developing world's demand growth is not optional. He is not a transition sceptic but he is a gradualist, and he presents the transition as a decades-long process with a large role for natural gas.
Yergin is a consultant to the energy industry as well as a historian, which readers should factor into the framing. The book is a synthesis and it does not break new ground analytically. It was published in 2020 and predates the Russian invasion of Ukraine, which tested most of its European energy conclusions directly.
Key takeaways 7
- The American shale revolution removed the import dependence that had shaped United States Middle East policy for half a century and made energy sanctions usable as an instrument.
- Shale production responds to price faster than conventional supply, which caps oil price rallies and has permanently weakened OPEC's pricing power.
- Russia's energy relationship with Europe was built as an economic dependency that both sides treated as stabilising, and its political leverage was consistently underestimated.
- China's energy import dependence through the Strait of Malacca is the strategic constraint that drives both Belt and Road and its South China Sea position.
- The energy transition will take decades because energy systems are enormous, long-lived and embedded in industry, shipping, aviation and petrochemicals.
- Natural gas has a large role in any realistic transition path because it displaces coal in power generation faster than renewables can.
- Energy demand growth in developing economies is not optional and will determine global emissions more than policy in wealthy countries does.
Who should read it
Energy investors and executives who want a synthesis of the geopolitical consequences of shale and a gradualist framing of transition.
About Daniel Yergin
Vice chairman of S&P Global and co-founder of Cambridge Energy Research Associates; won a Pulitzer Prize for The Prize.
The Prize narrates the oil industry from the first Pennsylvania wells to the Gulf War, establishing how companies, states and cartels have set prices and controlled reserves - the standard reference for anyone underwriting an energy asset. The Quest and The New Map carry that account into shale, renewables and the geopolitics of the energy transition.
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