Customer Reviews

The Age of Oil: The Mythology, History, and Future of the World's Most Controversial Resource

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"Oil is the most vital resource of our time" - an attention-getting introduction to Maugeri's "The Age of Oil"

The first section covers the history of oil, beginning with Drake's discovery, Rockefeller's monopoly on refining and transportation, the entry of other competitors (Russia, Texas, Mexico, Venezuela), Churchill's leadership in converting the British Navy and then create a protected source in Persia, new uses (transportation, plastics) and the fading of its original attraction (lighting), the development of new industries dependent on oil use (autos, motels, gas stations), Texas' regulations providing a model for OPEC, new Arab producers, etc., with a periodic sprinkling of former warnings that we soon would run out. Then follows the '73 oil embargo, the '79 second shock (Iranian Revolution + rebellion in Venezuela + Soviet invasion of Afghanistan + the Iran/Iraq War), the '96 counter-shock caused by the Saudi decision to regain their market share (beaten down by considerable cheating among OPEC members; not motivated by Reagan's efforts to beat down the Soviets, though their lowered internal prices did not even cover production costs and the Saudi action sharply reduced their external earnings), and Hussein's '90 invasion of Kuwait (U.S. response was driven by fear he would go on to Saudi Arabia).

Maugeri also informs readers that Russia's shock therapy privatization failed due to the absence of a legal framework for the process, and the existing deep-rooted corruption within the system. The result was a redistribution of Russia's riches (including oil) into the hands of the elite, further acerbated by a "loans-for-shares" scheme by the oligarchs to prop up Yeltsin through the next election (Russia's failure to repay them was followed by rigged auctions that further enhanced the new capitalists' riches).

Ensuing negative production projections were caused more by disruption in Venezuela, Russia and Iraq, terrorism threats, oil companies' focus on buy-backs instead of exploration, oil company write-downs of reserves (due to the financial difficulty in developing, and in some cases even accessing them), China's surging use, and the Katrina disruption. A unique Maugeri contribution is his pointing out that environmentalists concerns also led to an exaggerated appearance of shortage due to special increased demand for the lighter, sweeter crudes most quoted in the media.

"The Age of Oil" then moves to the question "Are We Running Out of Oil?" Maugeri thinks not, again citing the numerous prior cries of impending doom. Rationale offered include Hubbard's theory applying ONLY to areas already well-explored (the U.S.), a new Russia theory disconnecting oil creation from organic sources - thus broadening its possible locations, improved recovery methods, inadequate exploration of large Middle East areas (the nations involved choosing instead to focus on developing existing fields - some of which still use 40+ year-old equipment), examples where prior recovery estimates proved wildly short (eg. Kern County, CA), neglect of alternative sources (shale oil, tar sands, ultra-heavy oils), and the potential improved efficiency from switching users to diesel.

Bottom-Line: Maugeri may well be correct in believing that oil doomsayers are overly pessimistic, especially given their track record. On the other hand, I'm also reminded of the hypochondriac who constantly woke up thinking he was dying - one day he was right! Finally, concern for global warming may make questions about oil reserves irrelevant!

I found this book to be a fantastic history of the oil industry and an interesting, thoughtful perspective on the not-so-dismal future of petroleum. I've read about 20 books on energy over the past two years. For me, this one ranks a close second to Vaclav Smil's "Energy at the Crossroads: Global Perspectives and Uncertainties"; ("Age of Oil", however, is much better suited for a general audience). I found it scholarly, logical, and pragmatic. I think readers will appreciate how Maugeri unravels the complex world of oil prices, economic, political and geological impact on exploration/production, and the mysteries of reserves accounting. At $49, the book is expensive, but I think it's worth the price to anyone who's interested in the history of and prognosis for oil. I read it in two nights and found it well worth the money.

Highly Recommended; In Part I of his book, Maugeri, a senior executive at ENI, the Italian oil "major", takes us through an overview of the history of "black gold" from its discovery up to the second Gulf War. This is a story that has been told by others (most notably Yergin). Part II, on the other hand, is primarily concerned with refuting the arguments of the oil "doomsayers" (see Simmons, Kunstler, et al) who predict a bleak future characterized by a growing World demand and a declining World supply of oil and gas. Maugeri thinks this is all nonsense, and he goes on and tries to refute each step in the doomsayers' logical construct.

At its core, Maugeri's position is based on simple microeconomics. This is the mainstream view which suggests that as with any commodity, high demand will lead to high prices which in turn will justify investments in exploration and extraction technologies, thus ultimately leading to higher supply and a fall in prices. In his view, the absence of any major new field discoveries in recent decades is nothing more than a reflection of a lack of investments in exploration during the eighties and nineties, as opposed to a clear signal that we are reaching the bottom of the barrel.

Similarly, Maugeri dismisses the concerns of the political and military strategists that fret over the West's dependence on the Middle East. In his view, the dependence is even greater in the opposite direction, a fact by now well understood by producing countries in the Middle East (including charter members of the "axis of evil" such as Iran) whose political survival is tied to satisfying the economic demands of their fast growing populations. Thus, the U.S. military presence in the Gulf region is viewed by Maugeri as unnecessary at best.

Maugeri is obviously an optimist. It is quite possible that in fact the necessary investments will be made, that new supply will come on stream "just-in-time" to meet the growing energy demands of another billion Chinese and another billion Indians eager to join the global economy and substantially raise their living standards. But there is no certainty that this will be so. It is just as easy and logically defensible to imagine a World of declining "cheap" reserves, forced to dig a lot deeper and a lot harder to satisfy the demands of a competitive global economy, where the supply trend is chronically out of step with demand, and where the market is hostage to the fear of the next supply disruption (sounds familiar?). What might be the market clearing price under such conditions? No one knows for sure. What we do know is that there is no economic law that suggests that the price of oil should always be lower than the price of a barrel of Perrier water ($426).

This was a really interesting book to read. It is well written, so even when he is giving the detailed history, it is easy to read. The book is non-political in my opinion. I was hoping for greater confirmation that we are not any where near peak oil. He seems to have this opinon (that there is plenty of oil) but does not really focus on it. He pretty much deals with the facts and lets you make your own conclusions. Many of the negative opinions seem to be from the "oil panic" crowd that does not want to have their point of view challenged.

The book is very educational and very informative. You learn that we are not likely to run out of oil any time soon, that we have been through many oil cylcles with extremely high prices, and the market always has stabilized.

Worth your time to read.

Excellent and very interesting book.

It contains a clear history of the oil industry and it's relevant events in modern history.

Highly recommended for anybody interested in economics, politics and history.

This book is worth reading: a broad and experienced view of the history of the energy industry; well-written and (especially considering the position of the writer as an officer of a major international oil company) remarkably objective in describing the rivalries of independents vs. majors and private companies vs. state companies. It is a worthy up-date to Daniel Yergin's monumental work, The Prize.

The book explains the role of oil in general from different aspects relying on personal expertise together with a deep view of the future.I supervised the translation of the book into Arabic after choosing one of our best translators to ddo the job.I also wrote an introduction to the Arabic version and later published three book reviews about it,one in a daily newspaper(Raya in Qatar),the other two in Monthly magazines(Doha in Qatar and Media/Communication in Saudi Arabia).The Arabic translation edition was sent to many leading persons in the field of oil industry .Kindly pass this information to the author and thank him on our behalf.

This book is a sustained and viscous attack on the "Peak Oil" crowd led by Campbell, Deffeyes and Simmons. They claim that we are at or near the peak in world oil production and alternatives will not be available soon enough to prevent a bidding war for declining supplies.

Magueri's incessantly attacks them page after page using terms such as "pseudo-science" "myth" and "doomsayers." Magueri sets up the straw man "are we running out of oil" and fails to adequately address the question "when will world oil production peak?" Magueri uncritically accepts the optimistic claims of Saudi Arabia, the USGS and CERA. Magueri says the 30% of the world's sedimentary basins are unexplored but does not name any such basin. He seems ignorant of the science of petroleum geology.

World oil production is going to be less in 2006 than 2005. If in a few years it is clear that we were past the peak when this book was published then all will agree that Magueri is a laughable, ingnorant and arrogant fool.

great background history to today's strategic events in Middle East