So the oil industry is about to come to an end?

The first pandemic of this century is the COVID -19 pandemic. Amongst other things, it precipitated a price war that sent petroleum prices tumbling in 2020. The news is they are again on the rise. As the new prices for oil super cycle – an extended period during which prices exceed their long-term trend – could be what we are heading into.

The experts view on this is that it is being driven by general supply shortages from the lack of investment provoked by the 2014 collapse in oil prices and the recently reduced investment in shale oil production. What’s more, demand growth has been triggered by a strong recovery in countries such as China, a big stimulus package in the United States and global optimism about vaccines.

Nevertheless, there are those who are of the view that this could be the last super cycle for oil. This is founded on the fact that major economies appear committed to replacing fossil fuels, an issue that has made some car manufacturers to respond by committing to replacing internal combustion engine vehicles with electric vehicles.

Howbeit, little has been said about the earth moving machines in that regards. Should it happen, this shift will transform the oil market into one consistent with the climate goals. As good as that sounds, it also poses a risk of disorderly adjustment for economies dependent on oil, with far-reaching effects that in some cases could spill over their borders. One of such economies is Nigeria!

So what I have just said is the politically correct view. However it leaves some salient issues begging for answers. To begin with, there are over ten thousand products that are made from crude oil. These include but not limited to:

Bearing Grease, Ink, Floor Wax, Ballpoint Pens, Football Cleats, Upholstery Sweaters, Boats, Insecticides, Bicycle Tires, Sports Car Bodies, Nail Polish, Fishing lures, Dresses, Tires, Golf Bags, Perfumes, Cassettes, Dishwasher parts, Tool Boxes, Shoe Polish, Motorcycle Helmet, Petroleum Jelly, Transparent Tape, CD Player, Faucet Washers, Antiseptics, Clothesline, Curtains, Food Preservative, Basketballs, Soaps, Vitamin Capsules, Antihistamines, Purses, Shoes, Dashboards, Cortisone, Deodorant, Shoelace Aglets, Putty, Dyes, Panty Hose, Refrigerant, Percolators, Life Jackets, TV Cabinets, Shag Rugs, Electrician’s Tape, Tool Racks, Car Battery Cases, Epoxy Paint, Mops Slacks, Insect Repellent, Oil Filters, Umbrellas, Fertilizers, Hair Coloring, Roofing, Toilet Seats, Fishing Rods and the one and only Lipstick!

Other products from Petroleum include, Denture, Adhesive, Linoleum, Ice Cube Trays, Synthetic Rubber, Speakers, Plastic Wood, Electric Blankets, Glycerin, Tennis Rackets, Rubber Cement, Fishing Boots, Dice, Nylon Rope, Candles, Trash Bags, House Paint, Water Pipes, Hand Lotion, Roller Skates, Surf Boards, Shampoo, Wheels, Paint Rollers, Shower Curtains, Guitar Strings, Luggage, Aspirin, Safety Glasses, Antifreeze, Football Helmets, Awnings, Eyeglasses, Toothbrushes, Ice Chests, Footballs, Combs, Paintbrushes, Detergents, Vaporizers, Balloons, Sun Glasses, Tents, Heart Valves, Crayons, Parachutes, Telephones, Enamel, Pillows, Dishes, Cameras, Anesthetics, Artificial Turf, Artificial limbs, Bandages, Model Cars, Folding Doors, Hair Curlers and many more!

The breaking news is that until a commercially competitive replacement for each of these items listed above, the end of oil is not likely to just happen. The emphasis is on commercially competitive.

There is also the issue that electric cars engines and the power that is produces as of today cannot power the earth moving machines. That may account for the reasons you don’t hear of companies like caterpillar or those involved in the making of defense vehicles talk about going electric. So an alternative needs to be found to that as well.

Electric vehicles run on batteries. It should be understood that commercially available batteries use a variety of metals and electrolytes. Anodes can be made of zinc, aluminum, lithium, cadmium, iron, metallic lead or lanthanide. The pollution effects of these sites are greater than that of Oil or coal by at least a factor of 10! You don’t have to take my word for it, simply perfume a Google search for a lithium or cadmium or cobalt mining site. There is absolutely no life that can exist in those places. We are also left with the small issue the ore for these minerals only produces about 2.5% of the metal. So to have about 2.5kg of Lithium, you will need a tonne of the ore.

This becomes relevant when we project a world of mostly electronic vehicles. These uses of batteries will still compete with the traditional uses of batteries lie your cellular phones and the related. The point being that they may have to drill most of the earth to the core in the places where these elements are found. There are chances that these elements can also be found on the moon, hence the new interests in moon activities but there is a caveat.

This could disturb the natural geography of the mood and cause its own equivalent of the earth quake. Should be moon be destabilized, these will be great tsunamis all over the world for it is the mood that’s responsible for regulating the ocean tides. I’m sure you get the picture.

So what exactly is your point? I’m glad you asked! There is politics involved in all these issues of the global crude oil and energy sustainability. And when it’s all about politics the truth does not necessarily win, or does it?

The English word politics is derived from the Greek Word politiká. It has its roots in the name of Aristotle’s classic work sometimes in the mid 1500s.

It has been translated as the ‘affairs of the cities’. In simple terms politics can be defined as the set of activities that are associated with making decisions in groups, or other forms of power relations between individuals, such as the distribution of resources or status. However a more simplified definition is gotten from Harold Lasswell, who once said that, politics is “who gets what, when, how”.

So when the issues is about a city, or the world or the world of business or an industry in business, the issues of who gets what when and how will have to have politics involved. The petroleum industry is no exception.

As has been discussed, the issues of crude oil coming to an end are the politics of energy transition. You don’t have to take it to heart. Let the politicians and the technocrats to their jobs. You will not suddenly become an expert in the industry buy listening to a few reports on the issue in CNN.