But the key thing is that Iraq, while it's got very large oil reserves, has marginalized itself as an oil exporter and these days its exports are only about one tenth that of neighboring Saudi Arabia.

I think the producers, for the most part, don't want to see prices skyrocket because that will only create problems for them down the road and would also be a, you know, would be a very serious shock for a world economy that can't afford serious shocks right now.

Cycles of shortage and surplus characterize the entire history of oil.

The world has produced about 1 trillion barrels of oil since the start of the industry in the nineteenth century. Currently, it is thought that there are at least 5 trillion barrels of petroleum resources, of which 1.4 trillion is sufficiently developed and technically and economically accessible.

The starting point for energy security today as it has always been is diversification of supplies and sources.

This has a lot to do with the unrest in Nigeria, but also with the production loss after the hurricanes in the Gulf of Mexico, the decline in Iraq since the 2003 war, and the decline in Venezuelan output since 2002.

First, we have to find a common vocabulary for energy security. This notion has a radically different meaning for different people. For Americans it is a geopolitical question. For the Europeans right now it is very much focused on the dependence on imported natural gas.

It's extraordinary how inventive one can be with ethanol right now.

Even Silicon Valley investors have put well over a $1 billion in new energy technologies.

But eventually it's a question of access: Getting access to fields is on top of the oil companies' agenda. We see a substantial build-up of supply occurring over the coming years.

The bulk of extra supplies that could be put into the market come from two places. One, they come from other Persian Gulf suppliers, of which Saudi Arabia is at the top of the list.

In a couple of years, the Chinese will be seen as regular participants in international industry. Their companies have to report to shareholders as well as to the Chinese authorities. They need to make money, they have to be efficient.

The Iranians know they hold high cards because of oil.

To meet the energy challenge requires the most important energy of all - human creativity. That's the real prize.