By Ronald Stein
Two of the fossil fuels, coal, and natural gas, are used to generate continuous uninterruptible electricity, but not crude oil, the third fossil fuel, as it is primarily used to manufacture oil derivatives that thousands of products are based upon, and the fuels for various transportation infrastructures.
Crude oil gets manufactured into oil derivatives for more than 6,000 products, and into transportation fuels needed by the world’s heavy-weight and long-range aviation, merchant ships, cruise ships, and militaries. Energy realism requires that legislators and policymakers understand the staggering scale of the decarbonization challenge.
President Biden continues to do everything possible within his executive powers to restrict the domestic supply of crude oil, even though it’s inconceivable that we would divest away from crude oil, just because 2 of the products manufactured from crude oil are gasoline and diesel fuels for the short-range and light-weight equipment like cars and trucks.
As environmental, social and governance (ESG) factors climb up the agenda there is a lost reality that the primary usage of crude oil is NOT for the generation of electricity, but to manufacture derivatives and fuels which are the ingredients of everything needed by economies and lifestyles to exist and prosper.
Escalating climate pressures are strangling capital flows for oil and gas producers, driving up the price of gasoline, electricity, and home heating. Fresh initiatives at the COP26 summit and net zero emission goals are killing oil and gas investments and are expected to further dial up the difficulties to maintain the crude oil infrastructure that allowed the world to populate to from 1 to 8 billion in less than 200 short years.
As we have learned from decades of ASCE Infrastructure Report Cards, under-investment in oil and gas exploration is a guarantee to facilitate the deterioration of fossil fuel infrastructures and lead to an economy rife with inflation and supply-chain disruptions. Divesting in crude oil, that gets manufactured into products that literally runs the world’s economies and lifestyles, is unconscionable.
Deteriorating oil infrastructure is a guarantee to inflict irreparable harm to the supply chain of crude oil to the 700 refineries worldwide that manufacture oil products to the world’s 8 billion people. With ESG divesting in oil and gas, these refineries need to borrow “expensive” funds to finance their infrastructure projects to continue delivering products to consumers, who pick up the extra costs, i.e., continued inflation. ESG worshippers should best quickly learn that without any clones or plans to access everything we get from crude oil efforts to cease the use of crude oil could be the greatest threat to civilization, not climate change.
While the wealthy and healthy countries have been enjoying the products manufactured from crude oil, poorer developing countries are already experiencing shortages of products available to wealthy countries as about 11,000,000 child deaths every year of which more than 70 per cent are attributable to six causes: diarrhea, malaria, neonatal infection, pneumonia, preterm delivery, or lack of oxygen at birth. About 29,000 children under the age of five – 21 each minute – die every day, mainly from preventable causes.
While at least 80 percent of humanity, or more than 6 billion in this world are living on less than $10 a day, and billions living with little to no access to electricity, politicians are pursuing the most expensive ways to generate intermittent electricity. Energy poverty is among the most crippling but least talked-about crises of the 21st century. We should not take energy for granted. Expensive electricity and fuels are being borne by those that can least afford living in “energy poverty”
Bank appetite to lend to the crude oil infrastructure sector has dropped since early 2021, driving up the cost of capital and hampering corporate America from maintaining the oil infrastructure for future generations. The domino effects from tinkering with the supply chain of crude oil, is supply shortages and soaring prices for thousands of products that support the entire medical industry, all branches of the military, airports, electronics, communications, merchant ships, container ships, and cruise liners, as well as asphalt for roads, and fertilizers to help feed the world.
The first use of oil-based fertilizers took place in 1946, and today our food supply is dependent on hydrocarbons. The world’s population of 8 billion souls depends on oil-based fertilizers to grow the crops and feed the animals that are consumed each year. Any cessation of hydrocarbons will immediately result in the annihilation of billions of souls dying from starvation, diseases, and weather-related deaths, returning the globe to a 1950 population count of approximately 2.5 billion souls.
Climate alarmism seems to be inexhaustible and if history is any guide, admitting their mistakes and rushing to undo the damage is not at the top of the list of likely responses. Thus, by divesting in crude oil infrastructure we can look forward to supply shortages of thousands of products manufactured from oil and crippling power prices and unreliable supplies to meet the demands of society.