We’ve heard quite a bit lately about the push toward decarbonization in developed economies across the globe.
What often goes unsaid amidst the chorus of voices seeking to ‘cancel’ crude oil may represent a corollary to Al Gore’s ‘Inconvenient Truth’, the documentary that alarmed millions and spurred climate activism to new heights at the turn of the century.
That new ‘Inconvenient Truth’ is that crude oil is one of the most fundamental and necessary inputsto maintain the standard of living the Developed World enjoys in the 21st century.
Why is crude so indispensable? Well for one, oil is among the most energy dense fuels on earth and is portable, allowing it to be used in transportation fuels at scale and be shipped around the globe. Moreover, crude oil is extraordinarily cheap when considering the energy it provides.
Consider this example: How much would it cost to hire four (strong) people to push your minivan down the freeway for 20 miles? Would it be $100/each? $500/each? More?
Perhaps a better question: Is there ANY wage you could offer to motivate someone to push a vehicle for 20 miles? Assuming a ~2 mph pace, this would take 10 hours of hard labor – with no breaks. Let’s be generous and assume you could find four willing, hard-working souls who were up to this task for $20/hr, which equates to an outlay of $800 for the trip.
This is, of course, an extreme example of a very inefficient use of labor; however, it should reinforce the significant societal value of high energy density fuels. The cost of gasoline – a direct derivative of crude oil – to provide the energy required for the illustrative trip above would cost only $2.41 (U.S. avg, 2/1/2021), a 330-fold reduction when compared with the illustrative example of human prime movers (i.e. the friends pushing your minivan).
There are an estimated 2.83 billion people in India and China, both developing countries, that use a small fraction of the per capita energy (10% and 34%, respectively) that is consumed in the United States – and it stands to reason that those same populations will not voluntarily limit their consumption to more expensive resources like human labor, animal prime movers or even premium-priced electric cars. (source: IEA, 2018, https://www.iea.org/data-and-statistics/)
While a common argument to ‘cancel’ crude oil comes from electric vehicle advocates, one must also consider that vehicles with batteries are simply storing electricity that was derived elsewhere – this is known as ‘secondary’ energy use. Provided such electric vehicles are utilizing grid electricity, those primary sources are composed of natural gas (31.6%), coal (27.6%), nuclear energy (22.9%), hydropower (6.7%), wind (7.4%) and solar (1.8%) installations.
The latter ‘renewable’ sources are growing rapidly on a relative basis as we have discussed in other posts (Solar’s Golden Era); however, they simply do not compare to the scale, marginal input costs, or reliability of fossil- or nuclear-derived grid electricity.
Are you ready to do without many of the common trappings of everyday life after crude oil is ‘cancelled’?
Many people simply don’t realize the ubiquity of petroleum-based products: imagine a world without any plastic or electronics, without makeup or most clothing, without concrete or asphalt roads, or without ammonia for fertilizer to drive crop yields that feed global populations increasingly reliant on abundant foodstuffs.
The better question might be ‘What can’t we make from petroleum?’
In order to ‘cancel’ crude oil, it is necessary to synthesize the chemical inputs for all of these products.
To accomplish this monumental task, biomass has been considered as an alternative feedstock. While this is a creative solution, it becomes quite a circular argument: many of the same crops needed to perpetuate petroleum-derived products in a ‘post-crude’ worldcan only be grown at scale with the aid of petroleum-basedfertilizers, with the potential for enormous negative externalities when considering the impact to the price and availability of foodstuffs diverted to meet the requirements of synthetic products.
In future posts, we will discuss:
+Which derivative products from crude oil are the most difficult to replace and why?
+How long (and how difficult) would a complete transition away from crude oil actually be? What would be the human and economic cost to accelerate this timeline?
Andrew Schaper is a professional engineer and principal of Schaper Energy Consulting. His practice focuses on advisory in oil and gas, sustainable energy and carbon strategies.