I saw a free
download for an advance PDF copy of this book, and it looked interesting, so I
downloaded it. This is a book about energy realism, something that I strongly
support and that I believe is necessary if we are to make the best choices
about energy. For many years I have read authors and reporters like Jude
Clemente for Forbes and Robert Bryce as they argue for realistic views about
energy. In terms of me reading this book, he is “preaching to the choir.” There
are many quotable energy realism sentences in this book.
This book is very practical and
gives nice explanations to show why we simply can’t replace energy-dense,
reliable, and affordable energy like oil & gas, with unreliable,
intermittent, and higher cost (especially if battery systems are added) energy
sources like wind and solar.
“This book makes a specific argument: Oil and gas remain
central because they still carry scale, continuity, timing, and density better
than alternatives in many of the world’s most demanding energy jobs. That does
not mean every use is permanent. It does not mean innovation stops. It does not
mean no system changes. It means only that modern life is organized around
performance standards that remain unforgiving, and hydrocarbons still meet many
of those standards more effectively than the public conversation often admits.”
A key idea of Chapter 2 – Addition
is Not Replacement, is that the cost of useful energy is greater than the
cost of the production of that energy alone. The data show that there has only
been addition, not replacement.
“Aramco’s Amin Nasser stated the broader scale issue
bluntly at the 2025 Energy Intelligence Forum: “Over the past decade, global
primary energy demand has risen by the equivalent of around 40 million barrels
of oil per day. Hydrocarbons supplied two-thirds of that growth, despite 11
trillion dollars being spent on transition.” That is a useful counterweight to
the assumption that renewable growth alone proves replacement. It shows the
same layering dynamic from another angle: large spending on transition technologies
has occurred alongside continued growth in the hydrocarbon system because the
total load has kept expanding.”
Lurie notes that it is not just
production that matters, but deliverability as well. We are experiencing that
now, with the loss of energy being delivered from both the Middle East and
Russia at the same time, which has been stressing markets. He notes that in
order for a renewable energy source to actually replace dispatchable energy
sources:
“It must reach customers through real infrastructure. It
must finance not only generation, but also grids, storage, backup, maintenance,
and delivery. It must work through seasons, disruptions, price spikes, and
growth.”
“The central mistake in much of the energy debate is
therefore not optimism about new technologies. Optimism is necessary. The
mistake is confusing growth with displacement.”
He notes that energy trading is
often considered to be separate from producing and delivering energy, but he
argues that it is a necessary part of the puzzle to get energy here it is
needed at a fair price. Traded prices often expose constraints such as
inadequate pipeline capacity or high crack spreads that expose scarcity of
refined products. Energy trading systems connect supply to demand. He says that
energy trading is closely linked to logistics, financing, and physical
delivery. Electricity, he notes, is less tradable than oil and gas:
“Electricity is tradable, but it is not tradable like
oil or LNG. It must move through wires in real time, constrained by
transmission capacity, congestion, balancing needs, and storage duration. When
transmission is missing, generation cannot simply be placed on a ship and sent
elsewhere. When output arrives at the wrong hour, storage or backup must cover
the gap. That does not make renewable power unimportant. It means the trading
architecture is less flexible than the global oil and gas system unless grids,
storage, interconnection, and dispatch tools are expanded in parallel.”
Chapter 3 explores
‘Industrialization in Emerging Markets.’ He notes that at the beginning of
growth, it emerges physically, as, for instance, the movement of freight.
Freight is seen as essential.
“A corridor is not just a road or a rail line. It is a
timed system. Its value lies in whether trucks clear it reliably, whether
customs and handling are predictable enough to preserve schedules, and whether
the fuel needed to move across it is available at tolerable cost.”
Diesel and jet fuel are the fuels
that predominantly move freight and that is likely to continue as electrifying
these sectors has proven to be difficult. Corridors allow freight to move more
quickly and at less cost. When they are disrupted, as in the Persian Gulf,
currently, the implications cqn be dire. He does note that electrification of
the heavy-duty transport sector is happening at a small scale, especially in
China.
Industrial heat, or process heat,
is another area where fossil fuels reign because they often require
temperatures that only burning fossil fuels can provide. Electric arc furnaces
can take on some of these tasks at a higher cost, but the sector is not likely
to electrify to a significant degree anytime soon. He considers refineries:
“A refinery is not simply a fuel producer. It is an
example of controlled industrial heat translated into saleable molecules at
scale. Distillation, conversion, hydrotreating, and petrochemical integration
all depend on stability, timing, maintenance discipline, and dependable
throughput. That is what industrial depth looks like.”
Petrochemicals are the result of
using fuels as feedstocks for materials. Industrial societies require
materials. Refineries keep those needed materials in production and make supply
of those materials reliable. He stresses that hydrocarbons are not simply fuel
but materials as well:
“Packaging, coatings, fibers, solvents, films,
detergents, pipes, medical components, and countless industrial inputs carry
hydrocarbons inside the value chain.”
He also stresses that reliability
and predictability support growth while price volatility impedes it.
“Growth is physical before it is statistical. It happens
where goods move, heat holds, feedstocks arrive, and finance can finally see
far enough ahead to trust the next step. Dense energy matters not because it is
ideologically preferred, but because it remains one of the surest ways to widen
what an economy can practically do.”
Chapter 4 is about energy
security. He notes that energy insecurity often leads to price volatility and
volatility can be more damaging than a single high price. Price volatility
impedes planning and price stability aids planning. Uncertainty about cost can
be worse than the cost itself. He stresses the importance of spare capacity, as
OPEC utilizes it. It may seem inefficient, but it allows the market to respond
quickly to disruptions. The same is true of gas storage.
“Time matters in energy security because rerouting is
never instantaneous. Cargoes do not teleport. Tankers queue. Regas slots are
limited. Pipelines cannot reverse themselves without engineering. Refineries
cannot instantly run any crude in any configuration. Storage cannot be filled
after the emergency has already arrived. Security depends on how much room an
economy has between the first disturbance and the moment when somebody must
start curtailing, bidding aggressively, or shutting down. Buffers are the
difference between absorbing that interval and being ruled by it.”
He notes that it is not the
feedstock, crude oil, that is critical to daily life, but the refined products
people use. This is borne out in the current shortage of these products and
their inflated prices due to disruptions in the Middle East and Russia. Diesel
is a global workhorse, and disruptions of its supply, which we are currently
experiencing due to upheavals in the Middle East and Russia are showing our
vulnerability in terms of higher prices for consumers and businesses. As we all
well know, when fuel prices rise, the price of everything else also rises.
Thus, disruption in diesel supply undermines energy security, especially for
net importers. Storage and spare capacity can be seen as optionality. He states
that energy security has a market price. Reliable supply also has security
benefits through trade balances and industrial competitiveness.
“Reliable energy allows a country to attract industry,
run ports, support manufacturing, expand chemicals, operate data centers, move
exports, stabilize utilities, and keep capital confident. In a competitive
world, reliability itself becomes a form of industrial policy. The country that
can promise energy availability at scale has an advantage over the country that
can only promise ambition.”
Import dependence is a
vulnerability. Wealth also matters. High income countries that export have the
most advantages, including optionality and the ability to handle volatility. He
notes that the practical meaning of energy security is the ability to keep
normal economic life functioning under stress.
Getting back to the renewables
replacing hydrocarbons myth, he notes that even though spending on renewables
is beginning to exceed spending on hydrocarbons, investment in hydrocarbons,
including coal, in 2025 is projected at $1.1 trillion. And that amount goes a
lot farther with hydrocarbons in terms of reliable energy, specialist energy
such as for industrial process heat, and for electricity with much higher
utilization rates than renewables can achieve.
He praises AI and automation for
its role in optimization, reducing down time, ensuring precision, enabling
faster decision-making, and for predictive maintenance, all of which help the
entire system function better. He covers operational efficiency and
optimization in the upstream, midstream, and downstream sectors. Predictive
maintenance is especially valuable in the refining sector, where small issues
can be costly.
“A refinery is not just a machine. It is a schedule.
Once that schedule breaks, value leaks out in every direction. Feed plans are
disturbed. Offsites lurch. Operators stop optimizing and start stabilizing.
Product balances tighten. That is why refinery utilization and refining
performance appear repeatedly in company disclosures: the commercial value is
not only in the asset, but in keeping the asset inside its planned rhythm.”
“…the value of digital systems lies in their ability to
reduce operating chaos.”
“…the operating edge is procedural before it is digital.
The software matters. But the chain of command, the thresholds, the restart
logic, and the work sequence matter first.”
Chapter 6: Access Before
Transition, explores energy access and energy poverty, emphasizing that mere
connection is not service.
He cites the 2025 Sustainable
Development Goal 7 (SDG7) tracking report, which estimates that 666 million
people still lacked basic electricity access in 2023, while 2.1 billion people
still relied on polluting fuels and technologies for cooking. Sub-Saharan
Africa, where power grids and utilities are weak and poverty rates are high, is
a major region that is lacking. It is also a place where, as I have pointed out
elsewhere, the youth population is rising. Simply connecting to energy is
not enough, there needs to be reliable energy service that is adequate to meet
modern needs. That is why a few hours of power or powering lights with a solar
panel and small battery is not enough.
“African Development Bank analysis points to the same
pattern: brittle feeders, overloaded transformers, poor collection, and high
service cost per connection recur as barriers. When utilities serve long lines
badly, losses rise, bills go unpaid, and maintenance slips further. Service
worsens. Customers hedge with generators, batteries, charcoal, kerosene, and
whatever else keeps the household functioning. The system becomes more
expensive to run and less able to earn its way out of fragility.”
The region needs adequate power
supply and service that people are willing to pay for. It needs to be
adequately financed.
“Lenders and concessional funders will not keep
supporting a system that cannot distinguish between technical loss, commercial
loss, and honest low-income demand. Reliability, collections, and
creditworthiness do not move in sequence. They move together, or they fail
together.”
Many businesses, schools, and
clinics in these countries with unreliable grid power, also must rely on diesel
generators for backup. One study found that 15% of power-sector NOx emissions
in Sub-Saharan Africa come from backup diesel generators. Power theft and meter
tampering are also common in these areas of weak grids. People don’t want to
pay for power that is not reliable and collection rates for power bills remain
low. Those people must buy generator fuel as well.
Clean cooking fuels are another
huge challenge in Sub-Saharan Africa and Southeast Asia. Where power is
available and reliable, electricity can be used. LP gas is the cleanest of the
fuels when the others are wood, charcoal, and kerosene. Even where LP gas is
available, those other more polluting fuels are used as well. Women and
children, as a result, suffer lung diseases and other health problems. Having
an LP gas stove requires having a reliable supply of LP gas, usually a tank
refill, which is not always the case.
“Energy poverty is often a matter of insecure
substitution rather than absolute absence.”
“The energy challenge for the unserved and underserved
is not solved by announcing a future portfolio. It is solved by making the next
hour more dependable than the last. People live inside kilowatt-hours and
reliable refills, not megawatt announcements. Access that does not hold is not
access yet.”
Chapter 7 considers future growth
opportunities in the oil & gas sector, including LNG continuing to replace
coal. Lurie notes that gas is where demand and infrastructure still reinforce
each other most visibly. He notes the big spending in LNG infrastructure in
recent years. He stresses that LNG deals rely on commitments from buyers, which
push them to FIDs.
“The wrong way to read the future is as a referendum on
the whole sector. The better way is to ask which segments combine durable
demand, scalable infrastructure, and operating discipline. Those are the
segments where schedules can still be trusted long enough for capital to work.”
Another opportunity for LNG,
offshore wind, hydrogen, and CCUS projects is reusing existing offshore
tiebacks to accelerate project timelines and decrease project costs.
“Projects that can reuse hosts, subsea lines, export
routes, and service ecosystems typically deliver greater calendar certainty
than projects that must build every layer of infrastructure from scratch.”
He also cites the repeatability
and continued improvements of shale plays. Thus, shale plays will continue to
be good opportunities for oil & gas. To summarize: offshore tech can
benefit via reuse and shale can continue to benefit via repeatability.
He presents downstream upgrades as
an opportunity and cites growing refinery capacity utilization as proof.
Refineries continue to be profitable, and now especially so as their products
are in unprecedented demand compared to current choked supply. Refining margins
were expected to be fairly flat before the current geopolitical events made
them skyrocket.
He stresses that timing of often
the key to monetizing growth:
“Growth becomes cash only when capacity arrives on time,
runs steadily, and reaches customers inside a system that can actually absorb
it.”
Lurie states that future growth
should be ranked rather than narrated.
Chapter 8 explores refining,
refined products, and pricing. We have all had a lesson in this in recent
months, though it happened just after this book was finished. It really
exemplifies the importance of timing, reliable supply, and reliable delivery.
He stresses the importnac eof geography in refining projections:
“IEA projects 4.2 million barrels per day of new or
expanded refining capacity through 2030, partly offset by 1.6 million barrels
per day of announced closures. That is the shape of the market: new capacity is
being added, but not everywhere, not equally, and not always close to the
demand centers that feel product tightness first. Geography has become part of
the price.”
The current high fuel prices suck,
whether we agree with the Iran war or not, and whether we agree that Ukraine
should bomb Russian refineries or not. I wonder how the seasonal maintenance
shutdowns will affect prices going into winter if these issues are not
resolved. He notes optionality for refineries and crude buyers where in times
of low demand more crude can be diverted to crude-to-chemicals and back to
crude-to-fuels when demand is high. He notes, however, that the optionality is
limited.
Next, he considers hydrogen, which
is vital for refineries where it is used in hydrocracking and hydrotreating,
including hydrodesulfurization. Desulfurization requirements use energy and are
cost to run. Refineries need a reliable supply of hydrogen at low cost to best
meet requirements and keep their own product costs low. Hydrogen constraints
can impede capacity utilization.
He notes the rising crack spread
in April 2026, so the book’s timing is at least to then.
“The market is also telling you what it values. Jet and
diesel remain central to the margin story because middle-distillate cracks are
often where product tightness becomes most visible. Hydrocracker reliability,
FCC uptime, hydrogen availability, and maintenance timing are not background
engineering details. They are part of the price-formation system.”
The whole system sets the product
prices, not just the cost of the crude feedstock.
The final chapter is
self-explanatory: Reliability is Designed. Reliability involves a chain of
decisions.
“That has been the thread running through this book.
Chapter 3 showed that growth concentrates where freight, heat, and materials
can be trusted. Chapter 4 showed that energy security is an economic condition
before it is a geopolitical slogan. Chapter 5 showed that the operating edge is
procedural before it is digital. Chapter 6 showed that access means dependable
hours, not nominal connection. Chapter 8 showed that prices are increasingly
written through the reliability of complex conversion systems rather than
through crude abundance alone. Chapter 9 gathers those threads into one
conclusion: prosperity depends less on declarations than on systems designed to
work under stress.”
He cites the reliability of supply
in the form of available U.S. lease sales in the Gulf. He also sites the
reliability of environmental law, or what has become known as regulatory
certainty, noting that it doesn’t have to be perfect, but needs to be certain
enough to attract capital and not delay decision making. He cites the
industrial approach of Chevron in the Permian Basin where they operate
according to a long-term plan, which ensures steadiness and reliability of
production. They don’t respond to prices as much as companies that are more
focused on short-term plans. Procurement, interconnection, and delivery
contracts are all important for ensuring reliability. Functional port
operations are vital for reliability. Permitting timelines can aid or impede
reliability.
He cites improved leak detection
systems and faster leak response times as another technology that improves
reliability and can reduce downtime. Disruption mitigation is key to successful
operational optimization. He stresses the importance of adequate investment to
reliability:
“Underinvestment and logistics constraints do not have
to be the only cause of instability to matter; they become dangerous because
they reduce the system’s ability to absorb the shocks that commodity markets
already face. Clearing backlogs is not just an engineering task. It is a
stability policy.”
“That is the logic this book has been assembling chapter
by chapter. Industrial growth depends on systems that move freight and hold
heat. Security depends on supply that can be planned around. Operations depend
on routines that keep small problems small. Access depends on reliable hours,
not ceremonial connections. Prices are written by products and the systems that
keep them flowing. The final lesson now comes into view: all of those truths
are really about design.”
“…major operators still understand continuity, firm
service, and dense fuels as governing variables in the real system.”
“Reliability is what turns energy from a commodity into
a civilization-scale service.”
Energy abundance supports
reliability by being available, accessible, and deliverable. He offers one last
quip for reliability remaining to be the future of energy, noting we must be
honest and realistic about our energy systems:
“The task ahead is not to defend the past. It is to
build a reliable future. That future will include new technologies, cleaner
processes, better monitoring, lower emissions intensity, stronger grids, more
efficient operations, and broader access to modern energy. But it must also
include the fuels and infrastructure that continue to carry the heaviest
burdens of the real economy.”
This was a great book, emphasizing
the importance of energy realism, operational optimization, effective
disruption mitigation, optionality, and reliability, in our energy systems.
There are many quotable sections which I include. As someone who has favored
energy realism for a long time, I am quite familiar to many of the book’s
arguments, so he is “preaching to the choir” here. The book did not offer me
that much that was new to me, but others not so well informed should read it.
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