Windfall

How the New Energy Abundance Upends Global Politics and Strengthens America's Power

By: Meghan L. O'Sullivan

Narrated by: Eliza Foss

Length: 13 hrs and 34 mins

Publisher's summary

Windfall is the boldest profile of the world's energy resources since Daniel Yergin's The Quest. Harvard professor and former Washington policymaker Meghan L. O'Sullivan reveals how fears of energy scarcity have given way to the reality of energy abundance. This abundance is transforming the geo-political order and boosting American power.

As a new administration focuses on raising American energy production, O'Sullivan's Windfall describes how new energy realities have profoundly affected the world of international relations and security. New technologies led to oversupplied oil markets and an emerging natural gas glut. This did more than drive down prices. It changed the structure of markets and altered the way many countries wield power and influence.

America's new energy prowess has global implications. It transforms politics in Russia, Europe, China, and the Middle East. O'Sullivan explains the consequences for each region's domestic stability as energy abundance upends traditional partnerships and creates opportunities for cooperation.

The advantages of this new abundance is greater than its downside for the US: it strengthens American hard and soft power. This powerful book describes how new energy realities create a strategic environment to America's advantage.

Author bio: Meghan L. O'Sullivan is the Jeane Kirkpatrick professor of the practice of international affairs at Harvard University's Kennedy School of Government. She is also the director of the Geopolitics of Energy Project, which explores the complex interaction between energy markets and international politics. Between 2004 and 2007, she was special assistant to President George W. Bush and deputy national security advisor for Iraq and Afghanistan for the last two years of her tenure. She lives in Cambridge, Massachusetts. Windfall: The New Energy Abundance Upends Global Politics is her third book.

©2017 Meghan L. O'Sullivan (P)2017 Recorded Books

Great subject, tedious text, mediocre performance

What did you like best about Windfall? What did you like least?

I studied oil and gas economics in two college electives in 1973. It's an amazingly fascinating subject that blends technology, political economy, and finance. I was looking forward to this book after seeing it reviewed in the NY Times, but found it merely adequate. The text is much longer than necessary. The repetitiveness of many concepts would be good for teaching a beginners' course but simply gets tedious. The reader (these credits are the first on an audiobook when I've heard one mentioned as "a member of SAG/AFTRA" ) has a schoolmarmish tone that seems detached from the content of the text.

Any additional comments?

Anytime I see a book about energy economics, I feel bound to read it. Windfall helped me think through how "the new energy abundance" might affect strategic calculations between world powers. But I honestly could not wait for it to end owing to the performance and the repetititveness. Also, I accept that the author worked for the GW Bush administration, but she never seems to confront the major issue of what it means for civilization when all the greenhouse gases are released from newly available oil and natural gas, including of course methane leaks.

Meghan O'Sullivan is the next Daniel Yergin

What made the experience of listening to Windfall the most enjoyable?

Windfall is 2017 version of The Prize (by Daniel Yergin). a tour of energy from around the globe.

FOSSIL FUELS

Meghan O’Sullivan offers an intelligent but flawed view of today’s world. It is true that energy is critical for economic growth and improved human life. It is also true that energy need and development cause international conflicts in the post-industrial world. O’Sullivan does a masterful job explaining the role of energy, noting its cost while explaining fossil fuels are at a turning point in history. Fossil fuel prices fluctuated dramatically in the 20th century, but O’Sullivan suggests the trend in the 21st century, despite the rise between 2000 and 2008, will trend downward for three reasons. One is the recognition of energy’s environmental consequence and conservationists’ political response; two, energy’s extraction is becoming less costly for most fossil fuels. And three, technological advancement offers alternative sources of energy. What O’Sullivan correctly notes is that energy will remain a driving force behind international relations. However, her argument is flawed by suggesting governmental restrictions on discovery and growth of fossil fuels should be weakened. Even in the few years since publication of O’Sullivan’s book, the science of fossil fuel pollution is showing accelerating global warming with potential for a “no-return” human’ consequence. Global warming seems self-evident. That evidence does not change O’Sullivan’s insight to the outsize role energy plays in the real-politic world of today, yesterday, and tomorrow.

A super-sized editorial

There's a lot not to like about this book. If you accept that it has an agenda, it's tolerable.

Here's a paraphrase from the book to illustrate the point.

"Industry should consider environmental regulations as dual purpose; they both protect the environment and help companies maintain the social license to operate. Happily a number of initiatives have identified a number of best practices that can help ensure the development of tight oil and gas in a sustainable way."

According to the author, Michael Porter of HBS said that these practices would only cost a nominal amount, 1-2% of the lifetime revenues of the well, less than the average daily change of the spot price at the Henry Hub. Unfortunately the lifetime revenues of the well are realized over 25-plus years, not Immediately, when the cost of these practices would be borne by the oil company.

Consider a Bakken well in North Dakota. It might cost about $5 million to drill and complete. The average flow for the first 3 years should be 1,000 barrels a day. Production thereafter will diminish so sharply that about half the oil the well will ever produce will come during these first few years. At $70/bbl the well could be expected to yield $75 million of revenue during these 3 years, and another over the next two-plus decades. If it costs 1.5% of lifetime revenues for these practices, they would add $2.25 million to the cost of the well--an increase of 45% in the cost to drill it. It sounds reasonable the way Porter describes it, but is it?

By the way, daily fluctuations in Henry Hub spot price are irrelevant. They move the price both up and down, alternately hurting and helping the producer. Costs only hurt.