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T E W F
HE NERGY ORLD IS LAT
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T E
HE NERGY
W F
ORLD IS LAT
Opportunities from
the End of Peak Oil
Daniel Lacalle
Diego Parrilla
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This edition first published 2015
© 2015 Daniel Lacalle and Diego Parrilla
Registered office
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Library of Congress Cataloging-in-Publication Data
Lacalle, Daniel.
The energy world is flat : opportunities from the end of peak oil / Daniel Lacalle, Diego Parrilla.
pages cm
Includes index.
ISBN 978-1-118-86800-3 (cloth)
1. Energy security. 2. Energy consumption. 3. Petroleum reserves. 4. Petroleum industry and
trade. 5. Energy industries. I. Parrilla, Diego, 1973– II. Title.
HD9502.A2L3325 2015
333.79–dc23
2014044969
Cover image: ©shutterstock.com/Madlen
Cover design: Wiley
Set in 11/15pt in ITC Garamond Std by Laserwords Private Limited, Chennai, India
Printed in Great Britain by TJ International Ltd, Padstow, Cornwall, UK
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Dedication
From Daniel Lacalle
To all my colleagues in the energy sector and
decades of hard work looking for a better world,
and in particular to those who passed away
during geopolitical conflicts and terror attacks.
We will never forget you.
To Patricia, Jaime, Pablo and Daniel, my parents,
my brother, and his family. To all my uncles, aunts,
and cousins who give and share so much joy. To all
of them, my never ending source of energy.
From Diego Parrilla
To my wife, Gema, and my children, Yago, Lucas,
and Carmen. My life and purpose in life.
To my father, Paco, and my mother, Nieves, my
role models.
To my brother Paco, the best brother I could have
wished for. My inspiration.
To my sisters Nieves and Marta, the geniuses of
the family.
And, of course, to our sister Belen, our Guardian
Angel.
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Contents
Chapter 1 The Mother of All Battles. The
Flattening and Globalization of the
Energy World 1
Chapter 2 Lessons from the Internet Revolution
and the Dotcom Bubble 11
Chapter 3 The 10 Forces that are Flattening
the Energy World 31
Chapter 4 Flattener #1 – Geopolitics: The Two
Sides of the Energy Security Coin 35
Chapter 5 Flattener #2 – The Energy Reserves
and Resources Glut 53
Sorry, No Peak Oil 64
No Peak Gas Either 76
Chapter 6 Flattener #3 – Horizontal Drilling
and Fracking 85
Chapter 7 Flattener #4 – The Energy Broadband 103
Chapter 8 Flattener #5 – Overcapacity 117
Chapter 9 Flattener #6 – Globalization,
Industrialization, and Urbanization 123
vii
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viii CONTENTS
Chapter 10 Flattener #7 – Demand Destruction 131
Chapter 11 Flattener #8 – Demand Displacement 135
The Battle for Transportation Demand 135
The Battle for Electricity and
Industrial Demand 148
The Energy Domino 151
Chapter 12 Flattener #9 – Regulation and
Government Intervention 159
Regulation vs. Free Markets 160
The War on Pollution and Coal 165
Renewable Energy and the Disinflation
of Power Prices 172
Biofuels and Food Inflation 193
Chapter 13 Flattener #10 – Fiscal, Monetary,
and Macroeconomic Flatteners 207
The Btu that Broke OPEC’s Back 209
The Oil Tax Weapon 214
Monetary Experiments and the
Credit Risk Time Bomb 220
Financial Flows. Let’s Blame the
Speculators 232
Chapter 14 Implications and Opportunities
in the Financial Markets 245
Concluding Remarks 275
Appendix For A Competitive European
Energy Policy 279
Index 289
