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The Energy World Is Flat: Opportunities from the End of Peak Oil
A stronger, more informed approach to the energy markets The Energy World Is Flat provides a forward-looking analysis of the energy markets and addresses the implications of their rapid transformation. Written by acknowledged expert Daniel Lacalle, who is actively engaged with energy portfolios in the financial space, this book is grounded in experience with the world of high-stakes finance, and relays a realist's perspective of the current and future state of the energy markets. Readers will be brought up to date on the latest developments in the area, and learn the strategies that allow investors to profit from these developments. An examination of the markets' history draws parallels between past and current shifts, and a discussion of technological advancements helps readers understand the issues driving these changes.Energy has always been at the forefront of the economic agenda, being both the key to and a driver for development and growth. Its centrality to the world of finance makes it imperative for investors and analysts to understand the energy markets, irrespective of where on the wide range of energy spectrum observers they fall. The Energy World Is Flat is a guide to the past, present, and future of these crucial markets, and the strategies that make them profitable. These Understanding the state of the energy markets, including key developments and changes Discovering the ten pillars of a successful energy investment strategy Reviewing the history of the energy markets to put recent changes into perspective Learning which technologies are driving the changes, and how it will affect investors The recent energy market changes were both unexpected and so fundamental in nature that they represent a true shift in the energy macro- and microeconomic landscape. Investors and analysts seeking a stronger approach to these markets need the expert guidance provided by The Energy World Is Flat.
312 pages, Kindle Edition
First published November 13, 2014
About the author
Daniel Lacalle
32 books48 followersDaniel Lacalle is a PhD in Economy and fund manager. He holds the CIIA financial analyst title, with a post graduate degree in IESE and a master’s degree in economic investigation (UCV).Member of the advisory board of the Rafael del Pino foundation.
Commissioner of the Community of Madrid in London.
Professor at IE business school, IEB and UNED.
Ranked Top 20 most influential economist in the world 2016 (Richtopia).
Mr Lacalle has more than 24 years of experience in the energy and finance sectors, including experience in North Africa, Latin America and the Middle East.
Mr Lacalle is currently a fund manager overseeing equities, bonds and commodities. He was voted Top 3 Generalist and Number 1 Pan-European Buyside Individual in Oil & Gas in Thomson Reuters’ Extel Survey in 2011, the leading survey among companies and financial institutions.
Author of the best-selling books “Life In The Financial Markets” (Wiley, 2014) and “The Energy World Is Flat” (Wiley, 2014, with Diego Parrilla), translated to Portuguese and Chinese, as well as “Nosotros los Mercados”, “La Madre de Todas las Batallas”, “Viaje a la Libertad Economica”, “Hablando se Entiende la Gente” and “Acabemos con el Paro” (Deusto), with more than 50,000 copies sold, and regular collaborator with CNBC, El Español, El Mundo, The Commentator, and The Wall Street Journal. Mr Lacalle is also a lecturer at the London School of Economics, UNED University and IE Business School.
Commissioner of the Community of Madrid in London.
Professor at IE business school, IEB and UNED.
Ranked Top 20 most influential economist in the world 2016 (Richtopia).
Mr Lacalle has more than 24 years of experience in the energy and finance sectors, including experience in North Africa, Latin America and the Middle East.
Mr Lacalle is currently a fund manager overseeing equities, bonds and commodities. He was voted Top 3 Generalist and Number 1 Pan-European Buyside Individual in Oil & Gas in Thomson Reuters’ Extel Survey in 2011, the leading survey among companies and financial institutions.
Author of the best-selling books “Life In The Financial Markets” (Wiley, 2014) and “The Energy World Is Flat” (Wiley, 2014, with Diego Parrilla), translated to Portuguese and Chinese, as well as “Nosotros los Mercados”, “La Madre de Todas las Batallas”, “Viaje a la Libertad Economica”, “Hablando se Entiende la Gente” and “Acabemos con el Paro” (Deusto), with more than 50,000 copies sold, and regular collaborator with CNBC, El Español, El Mundo, The Commentator, and The Wall Street Journal. Mr Lacalle is also a lecturer at the London School of Economics, UNED University and IE Business School.
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Displaying 1 - 10 of 10 reviews
April 6, 2015
I have learnt so much from Lacalle. This excellent book about energy markets on really open my eyes. Looks like energy is going to cost lower for a long long time, which is great for all of us!
August 21, 2018
Two portfolio managers offer their view of the energy markets in a forceful manner. Their opinions would have few supporters a year ago but after the recent declines in oil prices the followers have probably increased in numbers. Madrid born Daniel Lacalle entered the financial markets after working a decade in the energy sector at Repsol. At PIMCO Lacalle was voted number one among European buy-side managers. Diego Parrilla is a commodity hedge fund manager. Their thesis is that energy prices will drift downwards over the longer term. “The last barrel of oil will not be worth millions. It will be worth zero.”
As the authors see it a number of factors conspire to drive energy prices down. Future energy demand is often overestimated. Increasing efficiencies has meant that the amount of oil needed to generate a percent of GDP-growth has been going down for decades. Despite okay economic growth post the financial crisis US has actually had flat energy consumption since 2005.
Short-term substitution between energy sources is tricky as power plants, ships, vehicles are constructed for one energy source and the life of this equipment is long. Over time however, differences in prices between energy sources spur human ingenuity and substituting technologies are created. Oil has had a near monopoly on powering means of transportation – until now. Electric cars and other emerging technologies are starting to make their way into the vehicle fleets lowering the demand for oil.
At the same time technological advances have created a supply glut in energy markets. This applies to fracking and horizontal drilling in the natural gas market as well as for state subsidized and overbuilt renewable energy sources. What really drives the “flattening” of the energy market, meaning the equalization of access and price levels, is a combination of build of pipelines, an expansion of LNG capacity, better connected energy grids and a more geographically diverse access of alternative energies like shale gas in China, tar sand in Canada, deep-sea oil in Brazil and so on. The result of all the above factors is lower and more uniform energy prices for the long run.
I like the thesis; I’m more mixed when it comes to the book. The author – and I write in singular as it is unclear what Parrilla has contributed – is smart, knowledgeable, experienced and funny in a cynical kind of way. He’s also unfocused, comes about as superior and lecturing and as lazy as he hasn’t taken the time to structure the book better. Although I agree that most of what’s being said sounds reasonable it doesn’t have to be said so many times in so many places in a book and some of the topics are fairly remote from the subject of energy markets – Lacalle’s opinions on investing, politics and economics all get air time. It’s hard to figure out whom the book has been written for. The book should have been shorter and more distinct.
That said the public discourse on energy markets too often centers on the views of Wall Street analysts and oil executives who have a vested interest in rising energy prices or on environmentalists and peak-oilers who substitute flaming opinions and good intentions for broad understanding of a very complex sector. This book brings forward a voice that is in short supply, which is excellent.
In the end it’s a balance between an interesting point of view and a less than perfect workmanship as an author and editor – I’m glad to have read the book.
As the authors see it a number of factors conspire to drive energy prices down. Future energy demand is often overestimated. Increasing efficiencies has meant that the amount of oil needed to generate a percent of GDP-growth has been going down for decades. Despite okay economic growth post the financial crisis US has actually had flat energy consumption since 2005.
Short-term substitution between energy sources is tricky as power plants, ships, vehicles are constructed for one energy source and the life of this equipment is long. Over time however, differences in prices between energy sources spur human ingenuity and substituting technologies are created. Oil has had a near monopoly on powering means of transportation – until now. Electric cars and other emerging technologies are starting to make their way into the vehicle fleets lowering the demand for oil.
At the same time technological advances have created a supply glut in energy markets. This applies to fracking and horizontal drilling in the natural gas market as well as for state subsidized and overbuilt renewable energy sources. What really drives the “flattening” of the energy market, meaning the equalization of access and price levels, is a combination of build of pipelines, an expansion of LNG capacity, better connected energy grids and a more geographically diverse access of alternative energies like shale gas in China, tar sand in Canada, deep-sea oil in Brazil and so on. The result of all the above factors is lower and more uniform energy prices for the long run.
I like the thesis; I’m more mixed when it comes to the book. The author – and I write in singular as it is unclear what Parrilla has contributed – is smart, knowledgeable, experienced and funny in a cynical kind of way. He’s also unfocused, comes about as superior and lecturing and as lazy as he hasn’t taken the time to structure the book better. Although I agree that most of what’s being said sounds reasonable it doesn’t have to be said so many times in so many places in a book and some of the topics are fairly remote from the subject of energy markets – Lacalle’s opinions on investing, politics and economics all get air time. It’s hard to figure out whom the book has been written for. The book should have been shorter and more distinct.
That said the public discourse on energy markets too often centers on the views of Wall Street analysts and oil executives who have a vested interest in rising energy prices or on environmentalists and peak-oilers who substitute flaming opinions and good intentions for broad understanding of a very complex sector. This book brings forward a voice that is in short supply, which is excellent.
In the end it’s a balance between an interesting point of view and a less than perfect workmanship as an author and editor – I’m glad to have read the book.
August 9, 2021
Bastante técnico, a veces algo pesado. No es el mejor de Lacalle
March 26, 2018
Este es un libro que deberían leer aquell@s que quieran saber más sobre el mundo de la energía, ya que desacredita lugares comunes y verdades infundadas. Escrito por el gestor Daniel Lacalle, "La madre de todas las batallas" es en primer lugar un libro optimista. Al contrario que otros libros sobre energía, éste no es un libro "agorero" sobre agotamiento de recursos naturales, guerras mundiales por los recursos o catástrofes medioambientales. "La madre de todas las batallas" tiene como objetivo explicar qué mueve el mundo de la energía, de dónde venimos y a dónde vamos en cuanto a fuentes energéticas y uso de las mismas. En segundo lugar es un libro financiero. Explica lo que mueve a los inversores, por qué los sistemas basados en subsidios son insostenibles, o por qué las grandes compañías petroleras son una "trampa de valor". L@s que lo lean sabrán más que el 99% de la población sobre energía. Está lleno de datos, tanto estadísticos como históricos, y está escrito de una manera amena y didáctica (no es un libro "pesado").
December 24, 2021
Good book for the uninitiated to learn about the broad dynamics and considerations of the energy markets. The book focuses primarily on high-level, macroeconomic view but also addresses some more nuanced micro-level aspects such as roll-yield risks in commodity ETF investments and attractive sub-sectors to focus on such as oil service companies and independent producers to achieve double-digit returns.
Some key ideas discussed:
- Oil and gas industry suffers from structural demand growth optimism which leads to structural overcapacity
- Gas prices in Europe and many developing countries are subsidized my governments which artificially deflates prices when global market prices are higher
- Energy markets are highly complex and driven by many significant factors such as geopolitics, demand and supply dynamics, new technology, monetary policy and fiscal policy, population and GDP growth, credit markets and etc…
Some key ideas discussed:
- Oil and gas industry suffers from structural demand growth optimism which leads to structural overcapacity
- Gas prices in Europe and many developing countries are subsidized my governments which artificially deflates prices when global market prices are higher
- Energy markets are highly complex and driven by many significant factors such as geopolitics, demand and supply dynamics, new technology, monetary policy and fiscal policy, population and GDP growth, credit markets and etc…
January 4, 2022
Muy revelador, ha resultado ser un libro muy fácil de leer, objetivo, muy buen explicado y estructurado. Han pasado 7 años de su publicación y las deducciones del futuro que te induce el libro son corroboradas por los hechos de la actualidad.
December 6, 2014
Este es un libro de economista. El autor intenta llegar al lector generalista pero solo esporádicamente alcanza ese objetivo, más propio de un periodista con conocimientos energéticos y económicos. El autor trata todos los aspectos económicos relacionados con la explotación y el mercado de los recursos energéticos, y en un contexto global. Pero deja de soslayo la crítica y el análisis político y social que de tales visiones económicas se podrían suscitar. El penúltimo capítulo, en el último cuarto de libro, está dedicado a España, y quizás por centrarse en un solo país sea este capítulo mucho más apasionante.
Merece la pena leer las citas siguientes:
no existe un solo país en el mundo que encuentra petróleo y rechace explotarlo. Ninguno. [se entiende aparte de España]
España importa más de un millón de barriles al día. Las estimaciones de producción [en Canarias] son de hasta 140.000 barriles al día, casi un 14% por ciento [de la importación]
El paro en Canarias supera el 30 por ciento en 2014. Posibles inversiones en Canarias –¡que no subvenciones!- pagadas con caja libre y de hasta 13.000 millones de euros pueden ayudar enormemente a la recuperación de la region (…) que algunos rechacen inversions petroleras es simplemente increíble (…) en Tarragona, por ejemplo, se explota a menos distancia sin problema (…) en Copacabana, Río de Janeiro, a menos de 2 kms de la playa
Fue precisamente Coalición Canaria (CC), el partido del presidente autonómico Paulino Rivero, la que en su programa electoral de aquel 2011 pedía para la region las competencias en lo relativo a las prospecciones por ser material “de gran interés para el futuro del archipiélago”.
Tenemos que preguntarnos: los canarios, ¿viven en la inopia o qué les pasa?
Pero antes de este capítulo solo había subrayado en una página, la 318, cuando nos dice su autor:
El problema es que los gobiernos consumidores están “enganchados” a los impuestos del petróleo. Necesitan esos preciosos ingresos para equilibrar sus presupuestos y su deuda.
¿Qué ocurriría si los coches eléctricos o de gas natural comenzaran a quitar cuota de mercado a los derivados del crudo? Sin duda, los gobiernos consumidores buscarían modos de sustituir los impuestos perdidos mediante otros impuestos
Este conflicto de intereses explica por qué muchos gobiernos de la OCDE han estado promoviendo cínicamente los combustibles alternativos “de puertas afuera”, pero no en la práctica.
Es este tipo de análisis de las implicaciones de las políticas de los distintos gobiernos nacionales y sus circunstancias lo que se echan de menos.
El penúltimo capítulo, dedicado a la situación energética en España, sí ofrece esta enjundia que echamos de menos: una voz mucho más implicada. Y el autor hinca mucho más el diente en su crítica a las políticas energéticas de nuestros gobiernos de turno: cierto que el caso español es un caso único en el mundo. Al menos en el tema energético España desde luego sí “is different”.
El libro no deja de ser interesante en general, pero quien le sacará más valor e información serán los lectores con intereses y conocimientos previos del mundo de las finanzas y de la economía. El esfuerzo del autor por ser ameno mientras describe muy de cerca todos los aspectos relacionados con las nuevas energías y los mercados energéticos mundiales es de agradecer; sin embargo, es como el que describe muy bien todos los árboles de un bosque, pero sin hablar del bosque en sí y de todos los habitantes y circunstancias que le afectan. Labor que obviamente daría otro enfoque a la obra y que, quizá, requeriría del talento sintetizador y divulgativo de un autor de la talla de, por ejemplo, Thomas Sowell (quien me ha venido a la mente varias veces durante esta lectura).
Recomendable (aunque decepcionante si uno piensa en el título).
November 5, 2016
Energy market subjected to forces of globalization resulting in flattening phenomena. Ten factors driving the flattening:
1. Geopolitics: historical oil shocks left international community insecure about energy supply. Without security, drove over-capacity to dilute power from a few OPEC hands
2. Resource glut: technology drove capability to extract oil unconventionally & increase extractable resources. Peak oil never came, human ingenuity won
3. Technology - similar to above. Horizontal drilling & fracking opened a whole new dimension. Shale oil revolution gave US energy independence & skewed the energy balance of power
4. Energy broadband - international logistics network spread energy supply security risks & competition flattens the market
5. Overcapacity: industry is structurally over supplied to overcome geopolitical barriers
6. Modernisation of emerging countries: skews energy demand away from traditional consumers to countries catching up
7. Demand destruction: technology drives efficiency
8. Demand displacement: move away from fossil fuel into renewables
9. Regulation: Govt intervention double edged sword. New regulations encourage clean energy sources however other intervention e.g. subsidies, tax cuts restrict free market & keep inefficient companies alive for social/political reasons. This slows down progress
10. Macroeconomics & Fiscal: money politics drive behaviours not consistent with fundamentals. Increasing credit bubble and quantitative easing provide cheap loans & support economically unsound investments
1. Geopolitics: historical oil shocks left international community insecure about energy supply. Without security, drove over-capacity to dilute power from a few OPEC hands
2. Resource glut: technology drove capability to extract oil unconventionally & increase extractable resources. Peak oil never came, human ingenuity won
3. Technology - similar to above. Horizontal drilling & fracking opened a whole new dimension. Shale oil revolution gave US energy independence & skewed the energy balance of power
4. Energy broadband - international logistics network spread energy supply security risks & competition flattens the market
5. Overcapacity: industry is structurally over supplied to overcome geopolitical barriers
6. Modernisation of emerging countries: skews energy demand away from traditional consumers to countries catching up
7. Demand destruction: technology drives efficiency
8. Demand displacement: move away from fossil fuel into renewables
9. Regulation: Govt intervention double edged sword. New regulations encourage clean energy sources however other intervention e.g. subsidies, tax cuts restrict free market & keep inefficient companies alive for social/political reasons. This slows down progress
10. Macroeconomics & Fiscal: money politics drive behaviours not consistent with fundamentals. Increasing credit bubble and quantitative easing provide cheap loans & support economically unsound investments
December 20, 2015
Do not demonize technology in a regional and ideological way. :)
June 7, 2016
Magnífico estudio de un experto
Ofrece puntos de vista profundos y sorprendentes por poco habituales
Quizá podría haber sido algo más breve
Ofrece puntos de vista profundos y sorprendentes por poco habituales
Quizá podría haber sido algo más breve
Displaying 1 - 10 of 10 reviews