Thanks for the link, PG. OK, here goes my first attempt to earn a Daniel Yergin Secret Decoder Ring.

Re: "an integrated energy disaster" and "The full extent of the Gulf of Mexico energy infrastructure is hard to grasp" -- he means that every loss has impacted every other loss and the immediate situation is fubar.

Re: "Our platforms and facilities are designed for a 100-year storm. But this storm was something else." -- I am gratified that this obsevation, which I made on Sunday before the storm, is confirmed here. Climate change, anyone?

...the SPR is proving its role--not as a tool of market management, but to offset a major disruption, protect gross domestic product, and maintain the viability of our economy...

Well, it looks like a market management tool from where I'm sitting. In fact, I believe it is the only thing keeping oil prices from going well over $70/barrel.

A package of responses, such as properly inflated tires, adherence to speed limits, consolidation of trips, and tune-ups, could cut gasoline consumption by 10% to 20%. This needs to be reiterated again and again, for modest restraint on demand is the quickest way to take the pressure off the market. The flexibility of markets and the resilience of the energy sector are the most effective antidotes to high prices and disruption. We can see markets working, also, in the substantial build-up of supply from around the world that will occur over the next few years.

OK, we're zeroing in on the heart of matter here. We need to conserve now and wait a couple of years for that supply windfall that's coming our way. Markets are not flexible or resilient now but they will be soon.

The rocks under the gulf are highly prospective, and companies will carry on applying capital and ingenuity to developing the resources--now planning not for the 100-year storm, but for a 200-year one. Oil production from the gulf could rise from two million barrels today to 2.4 million by 2010. That would mean the gulf's share of total U.S. oil production rising from today's 35% to 45%, although the recovery from Hurricane Katrina could end up pushing that level back a year or two.

In other words, I (Daniel Yergin) have learned nothing from Katrina. We will proceed with deep drilling in the Eastern GOMEX areas off Florida. There will not be anymore really big, intense hurricanes that we can't handle. We can engineer deep drilling infrastructure (platforms, rigs, pipelines) to withstand Category 5 hurricanes. The GOMEX future's so bright, I've got to wear shades!

...think more expansively about energy security...

But a host of developments--from terrorism to the California power crisis to the East Coast blackout to Katrina--have emphasized a return to what might be called the World War II model of energy security, assuring the security and integrity of the whole supply chain and infrastructure, from production to the consumer.

Despite the great windfall in excess capacity coming later, geopolitical necessity requires us to control the supply from the cradle to the grave, so to speak. Does anyone else find these two positions completely in opposition to each other?

By the way, here is an interesting related story Offshore Rig Rents Hit Record $400,000 a Day as Oil, Gas Rally (Bloomberg).