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Yergin Wins Energy Security Medal Despite Views On LNG And Peak Oil

Where is George Orwell when you need him?

It is a supreme irony that cornucopian oil industry mouthpiece and consultant Daniel Yergin should receive America's first medal for energy security named after James Schlesinger, the first U.S. energy secretary. For those not familiar with the late Dr. Schlesinger's views, in a keynote speech he told attendees at a 2007 conference sponsored by the Association for the Study of Peak Oil (ASPO) the following:

Conceptually, the battle is over. The peakists have won. I was sitting next to an oil executive in New Mexico just recently, and he said to the audience, "Of course, I'm a peakist. We're all peakists. I just don't know when the peak comes." But that represents part of a conceptual victory. And, therefore to the peakists I say, you can declare victory. You are no longer the beleaguered, small minority of voices crying in the wilderness. You are now mainstream. You must learn to take yes for an answer and be gracious in victory.

This was not a one-off announcement from Schlesinger. Nor did he fail to understand the context in which he was speaking for he said it all over again in 2010 at a conference sponsored by the U.S. affiliate of ASPO.

Related: Exxon Chief Says U.S. Oil Export Ban No Longer Necessary

Some five years ago in Italy, I concluded a talk by saying that like the inhabitants of Pompeii, who ignored the neighboring volcano Vesuvius until it detonated, the world ignores peak oil at its peril.

Naturally, Yergin completely ignored the contradiction between his views and Schlesinger's in accepting the award from the U.S. Department of Energy. But, it is difficult to understand just exactly how Yergin contributed to American energy security. This is the man who throughout the last decade kept predicting a flood of new oil that would send oil prices plummeting. That flood never appeared. Because of his vast influence, Yergin led a chorus of voices telling the United States and the world that there was nothing to worry about, that we didn't need to prepare for an era of constrained oil supplies and high oil prices. And, this is the foresight that has earned him a national award from the Energy Department for aiding our energy security?

In the news piece cited above Yergin behaves as if he foresaw the shale boom in oil and natural gas in the United States. But, back in 2003 in an article for "Foreign Affairs," he advocated a vast expansion of import capacity for liquefied natural gas (LNG) in the United States because "[i]n the next five years, it is likely to become a large gas importer; within ten years, it will overtake Japan as the world's largest." I'm not sure how this gem would have helped U.S. energy security either. To show that it was taken seriously, the Congressional Research Service in a report to Congress cited Yergin's article as evidence of the need to expand U.S. LNG import capacity.

Likewise, Yergin's advocacy for repealing a decades-old ban on U.S. crude oil exports--even as America imports about half its crude needs--seems entirely calculated to profit the industry (which can get higher prices for its light sweet crude abroad) rather than secure America's energy future.

So, on oil Yergin got it wrong, way wrong. On natural gas he got it wrong, 180 degrees wrong if we take his current position as a guide. Today, Yergin is touting the need to prepare to EXPORT U.S. natural gas to the rest of the world. This is no surprise since it is the position of his clients in the gas industry who would benefit from the higher prices available on the world market for gas. But, it seems quite obvious that exporting U.S.-produced natural gas would detract from, not enhance American energy security, a fact that is apparently lost on the Energy Department.

When oil was vaulting toward its highest price ever in mid-2008, Yergin felt he had to say something, and what he wrote for the "Financial Times" was essentially an explanation of why he believed he had so badly botched his previous calls. Suddenly, he advocating energy efficiency and biofuels. He foresaw oil losing some of its dominance as transportation fuel. He also did an about face on oil prices and for the very first time in the decade forecast RISING oil prices.

What we see then is a man who tries to save face when events show him to be embarrassingly wrong and who shills for the industry he represents the rest of the time. But all of the time the media and public treat him as if he were a disinterested party, only concerned about national and international well-being, an independent analyst who is in thrall to no one.

Related: With LNG Export Battle Won, Are Oil Exports Next?

However, Yergin's company, Cambridge Energy Research Associates (later acquired by IHS, Inc.), has always had major oil companies as clients. Even so, pronouncements from Yergin are not worthless. Rather, they should be viewed as a barometer of thinking in the oil industry. And, anything Yergin says which seems contrary to or, at least, beyond the interests of that industry is meant to maintain his image as an independent analyst, an image that was never consistent with his actual consulting work.

Daniel Yergin is a talented storyteller. He won the Pulitzer for his history of oil entitled The Prize. At any given moment, however, it's important to understand what story he is telling and on whose behalf he is telling it. That he is little concerned with anyone's security except that of his clients is obvious from his previous public statements and his long career of carrying water for the oil and gas industry.

Given all this, perhaps the most puzzling thing about Daniel Yergin is his mystifying ability to inflict amnesia on people regarding his previous pronouncements and predictions. It is this ability, it seems, that has made it possible for him to thrive as a consultant (despite his abysmal forecasting record) and to be the first recipient of an award, the Schlesinger Medal for Energy Security, named after a man whose views on the future of oil are very much the opposite of Yergin's.

By Kurt Cobb

(Source: http://resourceinsights.blogspot.mx)

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  • Lee James on October 08 2014 said:
    Mr. Yergin has been in the biz for a long time. He knows the way.

    We need industry heroes. The oil business is large and important to the success of our nation. We are heavily invested in petroleum. In fact. we show few signs of dampening industry hype, even as unconventional oil goes into over-priced over-production.

    Hopefully, Mr. Yergin still has a little time before his baby, the oil industry, appears as problematic as coal.

    America needs its heroes.

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