The first time anyone thought to use “rock oil” for anything other than patent medicine occurred because whale oil was outrageously expensive. Large whales became scarce. Whalers were killing smaller and smaller whales, and whale-oil prices spiked.
Many people would view that story as proof that oil’s reign as energy king is ending.
However, that view lacks the perspective on how hydrocarbons are knit into the fabric of our lives both literally and figuratively. I challenge you to find ten things in your house that aren’t a result of the use of hydrocarbons.
“Oh Matt, that’s silly,” you say. “Take this orange I’m eating right now, how can you say that this benefits from oil?”
Well, first, there’s the fertilizer for the tree, then the pesticides to keep off the bugs, then the wax to make the skin shiny, and the truck that drove it from California to your store.
Actually, even leaving out the obvious stuff like transportation, I am hard pressed to find stuff that doesn’t contain a plastic, wax, glue, or dye from petrochemicals.
As you can see, weaning ourselves off foreign oil is a lot more complicated than buying a hybrid and turning down the thermostat. I am actually excited, from a scientific standpoint, over the high prices of oil. I’ll tell you why.
I see these high prices as the spur for innovation in the hydrocarbon industry. We have a lot of marginal hydrocarbons, like oil shale and tar sands that are under-utilized. As oil gets more expensive, people will figure out a way to use them.
The high price of oil will bring further resurgence in coal. North America is rich in coal and it is contains a wealth of useful hydrocarbons. Gone are the days when we burned it for heat. I expect we’ll see coal become a source of hydrocarbons for petrochemicals and fuels.
Now, before my green friends out there string me up with organic rope, let me say that innovation works in several ways.
When Barbie’s plastic gets too expensive, Mattel will look to polymers made from corn and soy. Green diesel fuels are within reach, someone just needs to embrace them. Gas price woes ought to be directed at carmakers, who haven’t improved our gas mileage in decades.
I am seeing innovation in oil and gas exploration, and I’m excited. Old fields are being renewed and new ideas are being tested.
Some people see this as the end of the old oil regime and they are afraid. I see this as a paradigm shift that will foster creativity and reward forward thinking businesses.
With oil prices at all time highs, Big Oil companies are tripping over themselves to find new sources of oil. And they’re looking in places they never would have dreamed of a decade ago. Innovation in exploration techniques – using new technologies to extract oil once deemed impossible to get to – has become the new lifeblood of the industry.
Indeed, according the American Petroleum Institute, Big Oil will spend nearly all of their record-breaking earnings from 2005 on finding new sources of oil… from the tar sands of Canada to the deepwater basins of the world’s oceans. Chevron, for one, will spend $3.4 billion over the next three years developing oilfields off the coast of West Africa that hold over 1 billion barrels of oil.
Better buckle up, because the new hydrocarbon age is coming!
Matt Badiali
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