This has a lot to do with the unrest in Nigeria, but also with the production loss after the hurricanes in the Gulf of Mexico, the decline in Iraq since the 2003 war, and the decline in Venezuelan output since 2002.— Daniel Yergin
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The starting point for energy security today as it has always been is diversification of supplies and sources.
The bulk of extra supplies that could be put into the market come from two places. One, they come from other Persian Gulf suppliers, of which Saudi Arabia is at the top of the list.
But that's not enough: To maintain energy security, one needs a supply system that provides a buffer against shocks. It needs large, flexible markets. And it's important to acknowledge the fact that the entire energy supply chain needs to be protected.
In a world of increasing interdependence, energy security will depend much on how countries manage their relations with one another. That is why energy security will be one of the main challenges of foreign policy in the years ahead. Oil and gas have always been political commodities.
The world has produced about 1 trillion barrels of oil since the start of the industry in the nineteenth century. Currently, it is thought that there are at least 5 trillion barrels of petroleum resources, of which 1.4 trillion is sufficiently developed and technically and economically accessible.
We are living in a new age of energy supply anxiety.
We experienced similiar fears in the 1880s, at the end of World War I and II.
And we ran out in the 1970s.
Cycles of shortage and surplus characterize the entire history of oil.
People always underestimate the impact of technology.
To give you an example: In the 1970s the frontier for offshore development was 200 meters, today it is 4,000 meters.
A premium in the oil price of somewhere between 10 to 15 dollars a barrel reflects this heightened anxiety.
So the major obstacle to the development of new supplies is not geology but what happens above ground: international affairs, politics, investment and technology.
But eventually it's a question of access: Getting access to fields is on top of the oil companies' agenda. We see a substantial build-up of supply occurring over the coming years.
Even Silicon Valley investors have put well over a $1 billion in new energy technologies.
But the key thing is that Iraq, while it's got very large oil reserves, has marginalized itself as an oil exporter and these days its exports are only about one tenth that of neighboring Saudi Arabia.
It's extraordinary how inventive one can be with ethanol right now.
The Russians are turning east to the Chinese - to the Europeans' surprise.
It always seemed to me that the relationship between Russia and China would shift from being based in Marx and Lenin to being based in oil and gas.
First, we have to find a common vocabulary for energy security.
This notion has a radically different meaning for different people. For Americans it is a geopolitical question. For the Europeans right now it is very much focused on the dependence on imported natural gas.
To meet the energy challenge requires the most important energy of all - human creativity. That's the real prize.
According to one study by the United States Geological survey, 86 percent of oil reserves in the United States are the result not of what is estimated at the time of discovery but of the revisions and additions that come with further development.
The North Sea was supposed to run out in the 1980s.
Then in the 1990s. And now production is still on-line.
The Iranians know they hold high cards because of oil.
In a couple of years, the Chinese will be seen as regular participants in international industry. Their companies have to report to shareholders as well as to the Chinese authorities. They need to make money, they have to be efficient.
I think the producers, for the most part, don't want to see prices skyrocket because that will only create problems for them down the road and would also be a, you know, would be a very serious shock for a world economy that can't afford serious shocks right now.
Clearly, the Chinese need the resources, but I don't think they want to clash with the industrial world which happens to be the market for their goods.
An important United Nations environmental conference went past 6:00 in the evening when the interpreters' contracted working conditions said they could leave. They left, abandoning the delegates unable to talk to each other in their native languages. The French head of the committee, who had insisted on speaking only in French throughout the week suddenly demonstrated the ability to speak excellent English with English-speaking delegates.