The Quest: Energy, Security, and the Remaking of the Modern World

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by Daniel Yergin


  Here I owe special thanks and acknowledgment to Sue Lena Thompson, with whom I have worked to such great benefit over the years. She visualized and conceptualized the photo section. And I am grateful to her for the spirit and wisdom she brought, as she did to The Prize and Commanding Heights.

  I thank Ginny Mason for the distinctive and superb maps, and Sean McNaughton for the excellent graphics. The images they created help bring the geography and numbers in the story to life. Keith Rushworth of IHS also helped much with maps. In terms of the manuscript, I thank Anthony Martinez, who worked with me early on in the research and helped lay out the direction; and Russ Burns and Matt Vredenburgh, who worked intensively on the documentation. Freda Amar joined just in time to be part of the final phase.

  Jerre Stead, the chairman and chief executive officer of IHS, supported this project from the beginning and shared his perspectives and insight throughout. His leadership has brought IHS to its position at the crossroads of the global economy. At IHS, I would also particularly like to thank Scott Key, Mike Sullivan, Steve Green, Jane Okun Bomba, Jonathan Gear, and Dave Carlson, as well as Rich Walker and Ed Mattix.

  At IHS CERA, I’m blessed with wonderful colleagues who every day, with great expertise, help paint the picture of energy in its global setting. I feel that all of them helped me in one way or another, and I’m grateful to all. I do want to thank those who read and critiqued all or substantial parts of the book or contributed in other very significant ways: Bhushan Bahree, James Burkhard, Thane Gustafson, David Hobbs, Peter Jackson, Lawrence Makovich, James Placke, Matt Sagers, Jone-Lin Wang, and K. F. Yan.

  Other CERA colleagues who also contributed and helped me include: Atul Arya, Mary Barcella, Aaron Brady, Jean-Marie Chevalier, James Clad, Jackie Forrest, Tiffany Groode, Samantha Gross, Kate Hardin, John Harris, Bob Ineson, Ruchir Kadakia, Matt Kaplan, Rob LaCount, Jeff Marn, Thomas Maslin, Wolfgang Moehler, Gig Moineau, David Raney, Laurent Ruseckas, Susan Ruth, Enrique Sira, Leta Smith, Michael Stoppard, Xiaolu Wang, Irina Zamarina, and Xizhou Zhou.

  I also want to thank the expert colleagues at the sister organizations, IHS Global Insight, IHS Jane’s, IHS Herold, and IHS Emerging Energy Research.

  I would like to express appreciation to those who read parts of the manuscript and who contributed to my thinking and understanding: William Antholis, Nariman Behravesh, Christopher Beauman, Simon Blakey, Len Blavatnik, John Browne, Cai Jin-Yong, Jamil Dandany, John Deutch, Erica Downs, Charles Ebinger, Daniel Esty, Christopher Frei, John Fritts, David Goldwyn, Peter Gorelick, Todd Harvey, John Heimlich, Chris Hunt, Jack Ihle, Sultan al-Jaber, Jan Kalicki, Yoriko Kawaguchi, Doug Kimmelman, Pierre Lapeyre, Richard Lester, David Leuschen, Robert Maguire, Michael Makovsky, Ernest Moniz, Edward Morse, Ibrahim al-Muhanna, Moises Naim, Masahisa Naitoh, Kenneth Pollack, Peter Rose, Tyler Priest, David Rubenstein, Lee Schipper, Gordon Shearer, George Shultz, Frank Verrastro, Julian West, Mason Willrich, Barry Worthington, and Arthur Yan.

  I would also like to thank Strobe Talbott and the Brookings Institution, for the opportunity to participate in the Energy Security Initiative and chair the Energy Security Roundtable; Klaus Schwab at the World Economic Forum and Roberto Bocca, and Pawel Konzal at its Energy Community; Richard Levin, John Gaddis, and Ernesto Zedillo for the opportunity to engage on a regular basis with the faculty and students at Yale University; Patti Domm and her colleagues at CNBC.

  Last, but hardly least, is my deep gratitude to my family, my biggest supporters and my toughest critics. Experience has taught them to be patient and forgiving, at least up to a point. Alex and Rebecca brought their own knowledge of history and perspectives on this story to the continuing discussion. My wife, Angela Stent, has been through all my book projects. This is a better book for her eye and for the critical judgment that characterizes her own work. Her love and support have been sustaining all along this considerable journey. To her the thanks is lasting.

  Daniel Yergin

  CREDITS

  Photo insert #1: 1. Gary Kieffer/DOD/Time & Life Pictures/ Getty Images

  2. Alexsey Druginyn, STF/RIA Novosti

  3. Vincent Laforet/AFP/Getty Images

  4. N/A

  5. Alexsey Druginyn, STF/RIA Novosti

  6. Royal Dutch Shell/Newscast

  7. Courtesy of Marty Miller

  8. OPEC

  9. BP

  10. Henny Ray Abrams/AFP/Getty Images

  11. Ed Kashi/VII

  12. GOES 12 Satellite, NASA, NOAA

  13. © Kimberly White/Reuters/Corbis

  14. Rob McKee

  15. Photo by Eric Draper. Courtesy of the George W. Bush Presidential Library

  16. AFP/Getty Images

  17. Courtesy of The New York Public Library, www.nypl.org

  18. Image used with the permission of CME Group, Inc. © 2011. All rights reserved.

  19. Shane Bevel

  20. Daniel Acker/Bloomberg via Getty Images

  21. General Motors

  22. Da Qing Oil Field Iron Man Museum. Photo courtesy of Petroleum Industry Press.

  23. White House Photograph. Courtesy of the Gerald R. Ford Library

  24. Hu Guolin/Imaginechina

  25. Zhao Bing/Imaginechina

  26. World Economic Forum

  27. Sergey Guneev, STF/RIA Novosti

  28. © Underwood & Underwood/Corbis

  29. Marion King Hubbert Collection, Box #133, American Heritage Center, University of Wyoming

  30. Marion King Hubbert Collection, Box #83, American Heritage Center, University of Wyoming

  31. The Richard Nixon Presidential Library & Museum

  32. Courtesy of The Huntington Library, San Marino, California

  33. Anadarko Petroleum Corporation

  34. Eliana Fernandes/Petrobras Image Bank

  35. John Mosier/ZUMA Press

  36. Michael Jacobsen

  37. © Yann Arthus-Bertrand/Corbis

  38. Courtesy of Barco. Copyright Saudi Aramco; All Rights Reserved

  39. Copyright Saudi Aramco; All Rights Reserved

  40. Chris Hondros/Getty Images

  41. AP Photo/Bill Foley

  42. AP Photo/Iranian President’s Office

  43. Reuters/Fadi al-Assaad

  44. www.EastepPhotography.com

  45. Cliff Roe

  46. Scott Goldsmith

  47. Edison National Historic Site

  48. Charles Hoff/New York Daily News Archive via Getty Images

  49. GE Theater/Courtesy Ronald Reagan Library

  50. Hank Walker/Time & Life Pictures/Getty Images

  51. © Guy Christian/Hemis/Axiom/ axiomphotographic.com

  52. DigitalGlobe via Getty Images

  Photo insert #2: 53. The Granger Collection, New York City; All rights reserved

  54. Louis Agassiz, Études sur les glaciers. Neuchâtel, Jent et Gassmann, 1840.

  55. Reproduced by permission of Bridgette Khan

  56.–58. Scripps Institution of Oceanography Archives, UC San Diego Libraries

  59. © World History/Topham/The Image Works

  60. Dwight D. Eisenhower Presidential Library

  61. Alan Richards photographer. From The Shelby White and Leon Levy Archives Center, Institute for Advanced Study, Princeton, New Jersey, USA

  62. ABC News

  63. © Manchester Daily Express/SSPL/The Image Works

  64. Scanpix/Sipa Press

  65. George Bush Presidential Library and Museum

  66. Photo provided by the office of Representative Edward Markey

  67. Courtesy of the Ronald Coase Institute, Photographer: David Joel

  68. Bjorn Sigurdson/AFP/Getty Images

  69. Artwork by William J. Hennessy Jr./ CourtroomArt.com

  70. Courtesy: Jimmy Carter Library

  71. Bill Pierce/Time & Life Pictures/ Getty Images

  72. AP Photo

  73. N/A

  74. AP Photo

  75. © Ron Sachs/CNP/Corbis

  76. AP Photo/Marcio Jose
Sanchez

  77. Georges F. Doriot in classroom, 1963. Harvard Business School Archives Photograph Collection: Faculty and Staff, Baker Library Historical Collections, Harvard Business School (olvwork377919)

  78. Bloomberg/BusinessWeek

  79. Mark Coggins

  80. Andy Freeberg

  81. ETH-Bibliothek Zurich, Image Archive

  82. Reprinted with permission of Alcatel-Lucent USA Inc.

  83. National Air and Space Museum, Smithsonian Institution

  84. White House Photo

  85. Sandia National Laboratories

  86. Photo courtesy of John Perlin, from From Space to Earth

  87. Suntech Power

  88. The Western Reserve Historical Society, Cleveland, Ohio

  89. Jim Dehlsen, Ecomerit Technologies, LLC

  90. Courtesy of Vestas Wind Systems A/S

  91. © 2011 Ripley Entertainment Inc. Image courtesy of ASHRAE

  92. Carrier Corporation

  93. The Straits Times © Singapore Press Holdings Limited. Reprinted with permission.

  94. Rob Benson Photography

  95. Lifang Wang/Xinhua News Agency

  96. Ken Feil/The Washington Post/Getty Images

  97. Reprinted with permission of the DC Public Library, Star Collection, © Washington Post

  98. Mario R. Durán Ortiz

  99. © Richardo Azoury/Olhar Imagem

  100. Photo by R. L. Oliver. Copyright © 2006 Los Angeles Times. Reprinted with permission.

  101. © Bettmann/Corbis

  102. Courtesy of the Archives, California Institute of Technology

  103. AP Photo/Steve Yeater

  104. From the collections of The Henry Ford

  105. Cincinnati Museum Center/Getty Images

  106. AP Photo/Mark Humphrey

  107. Courtesy of Alden Jewell

  108. Mark Sullivan/WireImage/Getty Images

  109. White House Photo

  110. Tesla Motors

  NOTES

  Prologue

  1 George H. W. Bush and Brent Scowcroft, A World Transformed (New York: Vintage, 1999), p. 312 (“Nothing will happen”); “The Gulf War,” Frontline, PBS, aired January 9, 1996 (Egypt’s president); cable, U.S. Embassy in Baghdad to Secretary of State, July 25, 1990 (“disputes”); Al-Hayat, March 15, 2008.

  2 Bush and Scowcroft, A World Transformed, p. 317 (“crisis du jour”); Richard Haass, War of Necessity, War of Choice: A Memoir of Two Iraq Wars (New York: Simon and Schuster, 2009), pp. 61–62; interview with Boyden Gray.

  3 Bush and Scowcroft, A World Transformed, pp. 330, 365.

  4 Haass, War of Necessity, War of Choice, p. 148 (“classic containment”); Martin Indyk, Innocent Abroad: An Intimate Account of American Peace Diplomacy in the Middle East (New York: Simon and Schuster, 2009), pp. 40–43, 165 (“dual containment”); Charles Duelfer, Hide and Seek: The Search for Truth in Iraq (New York: Public Affairs, 2009), pp. 117–60.

  5 Interview with James Placke; Jeffrey Meyer and Mark Califano, Good Intentions Corrupted: The Oilfor-Food Scandal and the Threat to the U.N. (New York: Public Affairs, 2006), ch. 4; Independent Inquiry Committee into the United Nations Oil-for-Food Programme, Report on the Manipulation of the Oil-for-Food Programme, United Nations, October 27, 2005.

  6 Haass, War of Necessity, War of Choice, p. 162.

  7 Joseph Stanislaw and Daniel Yergin, “Oil: Reopening the Door,” Foreign Affairs 72, no. 4 (1993), pp. 81–93.

  Chapter 1: Russia Returns

  1 New York Times, December 26, 1991.

  2 Interview with Valery Graifer.

  3 Vagit Alekperov, introduction to Dabycha, the first Russian edition of The Prize.

  4 Yegor Gaidar, Collapse of an Empire: Lessons for Modern Russia, trans. Antonina Bouis (Washington, DC: The Brookings Institution, 2007), p. 102.

  5 Interview with Mikhail Gorbachev, Commanding Heights; Thane Gustafson, Crises Amid Plenty: The Politics of Soviet Energy under Brezhnev and Gorbachev (Princeton: Princeton University Press, 1989), pp. 103–36.

  6 Gaidar, Collapse of an Empire, pp. 105–9, 239.

  7 Interview with Yegor Gaidar; Thane Gustafson, Wheel of Fortune: The Politics of Russian Oil Under Yeltsin and Putin (forthcoming), p. 10 (government computers); Anders Aslund, Russia’s Capitalist Revolution: Why Market Reform Succeeded and Democracy Failed (Washington, DC: Peterson Institute for International Economics, 2007), p. 107 (“wildly”).

  8 Interview with Vagit Alekperov (“revelation”); Gustafson, Wheel of Fortune, pp. 5–14, 54 (“destroying the oil sector”); Vagit Alekperov, Oil of Russia: Past, Present, and Future (Minneapolis: East View Press, 2011), p. 324.

  9 Alekperov, Oil of Russia, p. 326; Vadim Volkov, Violent Entrepreneurs: The Use of Force in the Making of Russian Capitalism (Ithaca: Cornell University Press, 2002), ch. 6.

  10 Interview with Vagit Alekperov (“hardest thing”); Alekperov, introduction to Dabycha (“Soviet legacy”); Gustafson, Wheel of Fortune, p. 38 (walk to work).

  11 Chrystia Freeland, Sale of the Century: The Inside Story of the Second Russian Revolution (London: Abacus, 2009), pp. 114–23, ch. 8; David E. Hoffman, The Oligarchs: Wealth and Power in the New Russia (New York: Public Affairs, 2005), chs. 5, 12.

  12 Freeland, Sale of the Century, pp. 187, 384; Hoffman, The Oligarchs, ch. 18; Mikhail Fridman, “How I Became an Oligarch,” Speech, Lvov, November 14, 2010.

  13 Interviews with Archie Dunham and Lucio Noto.

  14 Interview with Archie Dunham.

  15 Wall Street Journal, September 27, 2010.

  16 John Browne, Beyond Business (London: Weidenfeld and Nicolson, 2010), ch. 8.

  17 John Browne, pp. 144–51; German Khan interview in Vedomosti, January 20, 2010.

  18 Peter Baker and Susan Glasser, Kremlin Rising: Vladimir Putin’s Russia and the End of the Revolution (Potomac Books, 2007), chs. 15, 17; Vladimir Putin, First Person: An Astonishingly Frank Self-Portrait by Russia’s President (New York: Public Affairs, 2000); Angela Stent, “An Energy Superpower” in Kurt Campbell and Jonathon Price, The Politics of Global Energy (Washington, D.C.: Aspen Institute, 2008), pp. 78, 95.

  Chapter 2: The Caspian Derby

  1 Peter Hopkirk, The Great Game: The Struggle for Empire in Central Asia (New York: Kodansha International, 1994), p. 1.

  2 New York Times, April 26, 2005.

  3 Strobe Talbott, “A Farewell to Flashman: American Policy in the Caucasus and Central Asia,” speech, July 21, 1997.

  4 New York Times, October 4, 1998 (“our strategy”); Jan Kalicki, “Caspian Energy at the Crossroads,” Foreign Affairs, September–October 2001.

  5 Robert Tolf, The Russian Rockefellers: The Saga of the Nobel Family and the Russian Oil Industry (Stanford: Hoover Institution Press, 1976), pp. xiv (“Russian Rockefeller”), 53–55; Steve LeVine, The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea (New York: Random House, 2007), p. 146; Ronald Suny, “A Journeyman for the Revolution: Stalin and the Labor Movement in Baku,” Soviet Studies, no. 3, 1972; Simon Sebag Montefiore, Young Stalin (New York: Vintage, 2008), p. 187 (“the Oil Kingdom”).

  6 Daniel Yergin, The Prize: The Epic Quest for Oil, Money, and Power (New York: Free Press, 2009), p. 220 (“The Bolsheviks will be cleared”); Geoffrey Jones, The State and the Emergence of the British Oil Industry (London: Macmillan, 1981), pp. 209–11 (Bolsheviks); Alexander Stahlberg, Bounden Duty: The Memoirs of a German Officer, 1932–1945, trans. Patrica Crampton (London: Brassey’s, 1990), pp. 226–27 (“Baku oil”).

  7 LeVine, The Oil and the Glory, pp. 50–51; Jeffrey Goldberg, “The Crude Face of Global Capitalism,” New York Times, Sunday Magazine, October 4, 1998.

  8 LeVine, The Oil and the Glory, p. 209 “all roads”; Terry Adams, “Baku Oil Diplomacy and ‘Early Oil’ 1994–1998: An External Perspective,” in Azerbaijan in Global Politics: Crafting Foreign Policy (Baku: Azerbaijan Diplomatic Academy, 2009), p. 228 (“disruptive”).

  9 LeVine, The Oil and the Glory,
p. 179 (“native son”); Heydar Aliyev, interview, Azerbaijan International, Winter 1994, pp. 7–9 (“core leadership”).

  10 Adams, “Baku Oil Diplomacy,” p. 2 (“Mission Impossible”).

  11 “Early Oil North or West,” Report, n.d.

  12 Interview with Jan Kalicki.

  13 LeVine, The Oil and the Glory, p. 350.

  14 John Browne, speech, CERA “Tale of Three Seas” Conference, June 20, 2001; Frank Verrastro, “Caspian and Central Asia: Lessons Learned from the BTC Experience,” Center for Strategic and International Studies, White Paper, April 2009 (“arrange and negotiate”).

  15 David Woodward to author (fax machine).

  16 Nick Butler, “Energy: The Changing World Order,” speech, July 5, 2006 (“engineering project”); Washington Post, October 4, 1998 (“real country”).

  Chapter 3: Across the Caspian

  1 Nursultan Nazarbayev, The Kazakhstan Way, trans. Jan Butler (London: Stacey International, 2008), pp. 88–89; Steve LeVine, The Oil and the Glory: The Pursuit of Empire and Fortune on the Caspian Sea (New York: Random House, 2007), pp. 97–100.

  2 Nazarbayev, The Kazakhstan Way, p. 93 (“raw materials”); LeVine, The Oil and the Glory, p. 92 (“frozen in time”).

  3 LeVine, The Oil and the Glory, pp. 93–94.

  4 Yegor Gaidar, Days of Defeat and Victory, trans. Jane Ann Miller (Seattle: University of Washington Press, 1999), p. 39 (“trump card”); Nazarbayev, The Kazakhstan Way, pp. 1, 112 (“coma,” “fundamental principle”); Nursultan Nazarbayev, Without Right and Left (London: Class Publishing, 1992), p. 148 (“appendage”); LeVine, The Oil and the Glory, p. 117.

  5 Nazarbayev, The Kazakhstan Way, pp. 95–96 (“contract,” Yeltsin); interview with Richard Matzke; LeVine, The Oil and the Glory, p. 239 (“prolonged and bitter”); Washington Post, October 6, 1998 (“their oil”).

 

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