5 comments about A Thousand Barrels a Second: The Coming Oil Break Point and the Challenges Facing an Energy Dependent World.

1. It feels appropriate to review this book as crude oil futures hit all-time contract highs... The 1980 inflation-adjusted highs for crude (roughly $100 per barrel in today's money) are just around the corner in geopolitical terms.
   
   In the book's title, "A Thousand Barrels a Second" refers to the point at which world oil demand exceeds 86 million barrels per day. (86.4 to be exact--there are 86,400 seconds in one day). The International Energy Agency (IEA) believes the 86 million threshold could be crossed this year.
   
   The "Coming Oil Break Point" refers to the aftermath of crisis and inevitable forced change. Tertzakian explains:
   
   "...the history of energy shows that a time of crisis is always followed by a defining break point, after which government policies, and social and technological forces, begin to rebalance the structure of the world's vast energy complex. Break points are crucial junctures marked by dramatic changes in the way energy is used."
   
   During the break point and the rebalancing phase that follows (which can last for 10 to 20 years), nations struggle for answers, consumers suffer and complain, the economy adapts, and science surges with innovation and discovery. In the era that emerges, lifestyles change, businesses are born, and fortunes are made.
   
   I read the entire book on one leg of a coast-to-coast plane trip, a feat made possible by the clarity and lucidity of Tertzakian's writing. He excels at laying out detailed concepts in ways that are easy for the reader to grasp and understand, and paints a convincing picture of the significant challenges we face.
   
   Tertzakian firmly grounds his argument in history, explaining what he calls the "evolutionary energy cycle" through the lens of past transitions. At one point we journeyed to the ends of the earth for whale oil, just as we do for "rock oil" (the literal meaning of petroleum) today. In the switch from wood to coal, tallow to whale oil, whale oil to kerosene, and so on, predictable aspects of the evolutionary energy cycle begin to emerge.
   
   In addition to outlining the situation we're in, Tertzakian gives a fascinating, though brief, history of the oil industry. He covers the rise of Rockefeller's Standard Oil, its eventual breakup, the curious origins of Saudi Aramco, the British Navy's fateful switch from coal to oil, energy's role in respect to railroads and WWII, and more.
   
   In my opinion, Tertzakian can be classified as an Urgent Simonist.* The word "Urgent" is meant to distinguish from the "Pollyanna" Simonists--those who believe technology will magically solve our energy problems with no real pain or discomfort.
   
   On the emotional subject of peak oil, there are two extremes of debate. At one end you have those who think civilization is doomed no matter what (the viewpoint of cheery websites like dieoff.org). At the other end, you have those who think peak oil will be shaken off like a mild head cold.
   
   Tertzakian helps bridge the gap between these extremes by explaining that yes, the challenge is serious, and gut-wrenching times are ahead... but we will ultimately see our way through. He is "urgent" in pointing out that the sooner we act the better, and pulls no punches in terms of what's at stake.
   
   Perhaps the real power of "A Thousand Barrels A Second" is in showing readers how to think about the big picture, orienting them to the mind-boggling mechanics of energy supply chains.
   
   There are so many steps and processes involved in the discovery, extraction, and distribution of energy that supply chains generally evolve at a glacial pace. Major energy transitions are measured in decades, not years; the scale and scope of the task is breathtaking to behold. Without taking a closer look behind the scenes, it's hard to get an intuitive sense of the time frames and logistical complexities involved. Tertzakian helps readers do that.
   
   In sum, if you truly want to understand the energy issues we face--or at least get a handle on the key elements--I strongly recommend this book. It could also make an excellent gift for those friends and colleagues locked in one of the "extreme" camps, i.e. "what me worry" vs. "we're all going to die." (The book might not change their mind, but it will certainly make them think.)
   
   I too consider myself an Urgent Simonist--we'll make it through, but only with serious pain--and believe that Tertzakian succeeds in his goal of providing "a highly researched and balanced assessment of our energy situation."
   
   *Julian Simon, an influential economist, wrote a book in 1981 called The Ultimate Resource, in which he argued that technology and human ingenuity would always ensure an abundance of raw materials. In 1980, he also made a famous wager that a basket of base metals would fall in price, rather than rise, over a significant period of time. He won the bet. Ever since, those who believe in the power of innovation to overcome doomsday scarcity predictions have been dubbed "Simonists."



2. The number of books on energy and oil seems to get bigger all the time. This is an interesting one for two reasons. First of all, it gives a very good background to previous energy transitions that can serve as a thought-provoking lead-in to the topic of oil. Second, the book does not engage in what some would see as the hype or doomsday approach of many books on global warming or peak oil. Tertzekian gives all the bleak numbers, but still manages to come up with an optimistic outlook. When I was reading the book, I felt like it might be a little too conservative, but this is the one I find myself quoting most often in discussions of energy issues.
   
   Anyone who is convinced that peak oil will lead to a frightening and drastic downfall of our way of life should read this book. It presents another possible point of view in which an evolution to a different but ultimately acceptable way of life is achievable. While peak oil writers have a lot of evidence on their side, Tertzekian has a lot of historical precedent on his.



3. I enjoyed this book. Mr Tertzakian knows something about oil. I don't share his optimist views of the future. Heavy sour and Tar Sands will not save the world, yet, overall Mr. Tertzakian is a smart man and I enjoyed reading his book. Regards, Keith Renick, Project Materials Specialist, Project Management Team, Riyadh Refinery, Saudi Aramco Oil Company, Retired



4. The author did an excellent job explaining the history of energy cycles and their general behavior. He explained in a simple way how the cycles worked and the time it takes to shift from one source to another source. Peter pinpointed what is behind the surge in oil prices and why it is different than the surges of 73 and 79. I really enjoyed his analysis of different countries' oil dependencies and their relations to GDP. The author discussed all the alternatives available on the table and showed which ones are likely to work within the near future and the extended future. He proposed several solutions to ease the burden on oil prices, some of them are very workable but need dedication from the population. I strongly recommend the book for anyone interested in energy matters and definitely for all energy companies' managers and executives.



5. This book gives a good introduction to the economics of energy, with an emphasis on what is going to happen when we run out of oil. It charts a middle course between doom-and-gloom pessimism, and blind optimism that innovation and market forces will automatically fix everything. The author uses his experience investing in the energy industry to give what seems to be a fairly realistic picture of what is likely to happen in the short term. The obvious fact is that as demand for oil begans to outstrip supply - and there are strong indications that the supply of oil is peaking or will peak soon - we will have to start making more use of other sources of energy. The good news is that additional sources are available, so civilization is probably not about to collapse. The bad news (for me at least) is that we are likely to follow the path of least resistance which entails making increasing use of other fossil fuels, especially coal. This is even worse for the environment than oil, and will just postpone and make more difficult the necessary process of transitioning to renewable sources of energy.
   
   While there is nothing very deep or subtle in the book, it gives a good overview of the history of our use of energy, and lots of facts and figures and graphs about our current energy use. In particular there are lots of graphs showing the evolution over time of the "energy mix", namely how much of our energy comes from various different sources. As such, this book could be a very useful primer in order to better understand what one reads about energy in the news and the significance of the various numbers that appear there.
   
   There are also a few very interesting tidbits. One of the more disturbing ones is that our rate of economic growth is strongly correlated with our use of oil. In other words, roughly speaking, for every dollar you spend, you cause a certain amount of oil to be consumed. The book claims that certain countries, such as Japan, have managed to neutralize this trend. However, because of globalization I'm not sure if it really makes sense to consider this question at only a national level. For example, lots of the fossil fuel that is burned in China is used to manufacture goods that are shipped to the US. This is an example of what I mean when I say that the book is not that deep or subtle.
   
   Anyway, if you want to better understand what is going on with our use of energy, this book is a good place to start.

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