The Oil Business
In 1859, a salt miner known locally as “Uncle Billy” found oil at a depth of 69 feet in Titusville, PA. The well was owned by Edwin L Drake, and their find revolutionized the world.
The properties of oil were not unknown prior to Uncle Billy’s discovery. People found oil floating on top of water, seeping out of the ground, and sometimes in the form of tarballs drifting ashore. It was used for heating, illumination, and for various medicinal purposes.
In fact, what prompted Drake to drill a well near Titusville in the first place was oil floating on water there. After Drake’s well, hundreds of companies rushed to stake their claims. The majority, as is often the case, went bankrupt.
But, not everyone. John Rockefeller being one of the more notable exceptions. Within a decade of Drake’s discovery, the Standard Oil Company founded by him was one of the largest companies in the world.
It’s hard to overstate the importance of oil to modern life, and to the economic well being of everyone. Per Forbes Magazine, oil is directly responsible for about 2.5% of world GDP, but that’s nowhere near the whole story. Oil and natural gas account for over half of humanities primary energy supply.
Oil and Gas power 100% of modern transportation which is responsible for 17% of world wide GDP, and is deeply involved in all other economic activity.
Think about this.. IF oil and gas suddenly stopped flowing, civilization would collapse in a matter of months.
The same Forbes article has another interesting tidbit; at any given time, there is more oil seaborn, than there are fish in the sea. Oil is a huge part of modern life.
There is much talk about “renewables” as a replacement for oil and gas, but it’s only talk, no science. Oil alone, not even including natural gas, powers the world at about a 1500 X 1 ratio over renewables, and there is nothing on the horizon that is going to change that. Nothing.
The efficiency of solar, or wind, or biomass, or just about anything else you can think of pales next to oil. Again, if oil and gas stops flowing, renewables aren’t going to save you. World wide starvation and misery are the sure result.
Here’s the good news… the “peak oil” theory that was pushed a few years ago has proven wrong. We have more known natural gas reserves in the United States, for instance, than anytime since we started looking at it.
Advanced technologies can find and recover oil and gas in places and at rates hitherto thought impossible. And, there’s much more down there than we thought.
All of you remember the BP Oil spill, and all the news it got. The spill was terrible, but ironically, the bad news covered up some incredibly good news.
When the Macondo wellhead first blew, it was estimated that maybe 1000 barrels a day was leaking. Then upon further investigation, they raised that to 12,000 barrels, then to 25,000, and finally the best research from Woods Hole estimated that 60,000 barrels a day was blowing into the Gulf.
A terrible ecological problem, but overlooked was this fact.. BP had found a virtual river of oil. Very few people previously thought it possible.
Bottom line.. we have a LOT of oil and gas.
Interestingly, there are two theories about the origins of what we term fossil fuel. One is that it indeed does come from untold amounts of biological material mixing with clay over long periods of time. That’s the prevailing theory. But, there is another.
Pushed mainly by the late Cornell Astrophysicist Thomas Gold, these folks think that oil comes from the planet itself, and is being made today. Gold and his team actually made a hydrocarbon molecule in a lab experiment, and he later dared anyone to do the same with a “pot of ferns.”
Proponents of this theory point to long produced oil fields in the Gulf of Mexico, and which by all calculation should now be exhausted, seemingly refilling.
Tune in and hear more about it.
Driven to Business, hosted by Eddie Mayfield airs every Saturday at 11 AM on Atlanta’s Business radio, Biz 1190 AM. The show is streamed live on Biz1190.com and podcast on eddiemayfield.com and itunes.
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