Tintin Goes to Prince William Sound

Steve Coll begins Private Empire, his thick new history of Exxon, with an account of the calamitous wreck of the Exxon Valdez (23 years ago, can you believe?). It's classic Coll: dense and granular, smoothly written and all impelling the conclusion that the story isn't quite as simple as what you might have heard on CNN. Specifically the notorious Captain Hazelwood, universally cast as the villain of the piece--okay, Captain Hazelwood screwed up. But it takes more than one man to make a clusterslick of Valdezian proportions, and Captain Hazelwood's draw had the ill fortune to fill an inside straight. If anything can go wrong, as the saying goes, it will.

It's a gripping if somewhat demanding read, and it stands as a model for the book as a whole. The book, that is, offers a full panoply of what Coll does best: a dozen or so instances of first-rate long-form journalism, loosely bound together by a common subject: the world's third*  largest non-sovereign oil company.   "Common subject," then, is easy enough; "common theme" is perhaps a little harder and I am not sure I have grasped the unifying principle behind Coll's diverse episodes.   But in default of a better, you might want to choose "proven reserves"--the never-ending and ever-more-difficult to tell the world that they end each year with as much oil as they had at the beginning.

It's a loser's game for somebody someday and even now it requires a lot of smoke and mirrors, not to say Calvinball: Exxon dutifully reports one set of numbers, as instructed, in its filings with the SEC, and a different, more generous account for everyone else.  The difference is tar sands: the SEC doesn't think they are "oil," but apparently they look like oil to an oil company with an accounting problem.

Anyway, it is "proven reserves that drove Exxon into Chad, French Equatorial Africa, Aceh (made you blink!--it's on the northern tip of Sumatra) and the like.  All of which gives the book the flavor of a Boys' Own story until you recall these are real people whose lives are being disrupted, real people being killed or kidnapped, real dictatorial thugs being enlisted as allies in the search.  It also makes room for a remarkable door-closing farce, where an Enron lawyer, collaborating with a heroically acquiescent Federal judge, succeeds in snaffling $300 million out from the cotton-pickin' paws of Venezuela's Hugo Chavez. 

All good stories, though in general, you'd need a strong motivation to see through Coll through every sidetrack and back alley.  The moral is there isn't any moral.  If Enron is to stay in business, it must keep up the search for new supply with the same devotion that your ordinary Congressman shows to his fund-raising.    Still, oddly enough, the book does end on a discontinuous note as Exxon discovers the magic of America's underground gas lode and embarks on a new adventure which just might turn it into an entirely different kind of energy company. For  moment the problem of reserves seems to be "solved," or at least kicked down the road.  For the moment the Exxon team can lighten up.  But only for a moment.  The fact remains that there is only so much of the stuff out there, and someday some Exxon CEO is going to have to throw down his cards and say "that's it I'm done."
===exa
*BP and PetroChina Co. Ltd. pip Exxon.  Also  thirteen sovereign companies.

Graetz on Energy

Michael Graetz' End of Energy was published just a bit over a year ago and so far as I can tell, sank like a stone.  This is perhaps unremarkable: there's no hook here, no soundbyte, nothing to put the  author on The Daily Show.  Well: nothing except, perhaps, the title, but the title itself is misleading.  Graetz doesn't really talk about the "end" of anything, except possibility the imminent end of our capacity to kick the can down the road, to evade or sidestep any inducement to step up and address our imminent energy calamity (or calamities, if you give climate change a separate category).   Whatever; it's a shame he is so neglected.  What you've got here is a straightforward, nontechnical account of US government energy policy (and nonpolicy) since...

Since what?  Did you guess "the 1973 oil shock?"  Close, but no: Graetz starts his story with Nixon price controls in 1971, which more or less got the whole ugly decade off on the wrong foot.  The'73 shock figures largely, of course, and indeed the more you read this sort of stuff, the more you come to look back on 1973 as an infliction point not unlike August, 1914, before which everything was great (at least in retrospect), after which not so much so.   Graetz moves briskly forward from there through the Ford administration and then to the misfortunate enterprises of poor, perplexed, Jimmy  Carter, who did succeed in deregulating natural gas but met frustration in almost every other energy endeavor.

One does have to wonder how much of Carter's disappointing record was bad luck and how much sheer incompetence.   Graetz does quote Yale historian Gaddis Smith who said "President Carter inherited an impossible situation and made the worst of it" (Kindle 1860-61).  Either way, he is soon swept away by the tides of history carrying in his successor, Ronald Reagan, whose most noteworthy energy accomplishment may have been to take the solar panels off the White House roof (Reagan did vow to get rid of the Department of Energy but found that the old bulls on Capitol Hill weren't about ready to give up that kind of power).

Indeed one of the remarkable themes of the story is that so far as energy policy goes, there was s whole lot of nothing between 1981 and the early 2000s, when "energy" reemerged under the guise of "climate change."  And here what you noticed is how amazingly little has changed over the decades.  Graetz sums up:

In 2008, just 7.4 percent of our nation's total energy supplies, including biomass, primarily ethanol in fuel, came from renewable sources-compared to about 5.5 percent when Jimmy Carter took office more than three decades earlier. Of that 7.4 percent, more than half is from ethanol and about 2.5 percent still comes from hydropower.  Although growing industries, wind and solar power together accounted for about one percent of the total.

Kindle 1704-6.  Graetz does identify one area of relative success:  the campaign to conserve energy, perhaps most notably CAFE standards for vehicle emissions.  But he adds a caution:

 Any effort to conserve energy faces four challenges. First, inertia: absent large and obvious cost savings or specific legal requirements, it is difficult to stimulate people to make the kinds of changes that would substantially reduce their  use. Second, the size and timing of costs: energy savings often require large up-front costs to achieve small amounts of cost reductions spread over a long period. Third, information and uncertainty: people do not know how much an investment in energy conservation will really save them. Fourth, the frequent mismatch between who will bear the costs of energy savings expenditures and who will ultimately reap the benefits of lower periodic costs: builders, for example, may not be able to recover the costs of energy-efficient features from their buyers.

Kindle 1712-1714.  And what happened to generate the long hiatus between the (mostly frustrated) initiatives of the Carter years and the (still frustrated) initiatives of the new century?  Graetz doesn't quite say so in words but there is one unifying theme that drives, or fails to drive, the energy agenda: the price of oil   Graetz presents the data to show that the inflation-adjusted price of oil peaked at just about the end of the Carter years; then fell, and did not exceed its earlier peak until 2008.  Man, if gasoline ever hits $4 a gallon, there's no tel-- oh, right.