James Schlesinger, America's first energy secretary, once said, when it comes to energy "we have only two modes complacency and panic." As oil turned 150 last week, panic button seems to have been pushed in.
Oil has a checkered history. One hundred and fifty years ago on Aug. 27, 1859, in the sleepy lumber town of Titusville, Pa., "Colonel" Edwin Drake hammered a pipe into the ground in search of a replacement for depleting whale oil as a fuel for lamps. At a depth of 69 feet below ground he finally struck oil, and the world changed forever. The oil era had begun!
Oil today is one of the most strategic commodities in the world. And it continues to stir commotion -- with political connotations. Clarion calls to "turn oil into salt" could be heard from far off places. Odd as it seems, salt was a strategic commodity too and for centuries wars were fought over salt. Consumers thought salt to be conferring power to the nations holding salt mines, as salt had a virtual monopoly over food preservation.
However, with the advent of canning, electricity and refrigeration, salt lost its strategic status, and salt-rich domains like Khewra, Orissa, Tortuga and Boa Vista that once held much sway are no longer places of strategic importance. Countries still use, import and trade salt, but it is no longer a commodity that dictates world affairs.
Oil also has a turbulent history. It has been a source of both prosperity and global volatility. Oil became a backdrop behind great powers' foreign policies. During World War I, "the Allies had floated to victory upon a wave of oil," Lord Curzon once noted. The post-war contention between Turkey and Britain in the early 1920s was basically over the oil riches of Mosul, Iraq. Imperial Japan's insatiable need for oil led it to adopt in the 1930s an expansionist policy triggering an oil embargo by the US, then supplier of 80 percent of the island's oil imports. Tokyo's response, sending its navy to attack Pearl Harbor, provoked a four-year war that took two mushroom clouds to end. In Europe, Nazi Germany's need for oil compelled Adolf Hitler to invade Russia and later to divert his panzers from Moscow to the Soviet oil center in Baku, a decision that sealed the fate of the Third Reich.
With the war's end, attention shifted to the Middle East as the world's most important source of oil. Today, the region produces nearly 40 percent of the world's oil and is home to two-thirds of proven global conventional oil reserves and to over half of undiscovered reserves. And this is the crux of the problem. America's repeated military interventions in the Middle East and the "New Great Game" currently taking place in Central Asia have all been tied to oil resources, most agree.
Former US Secretary of State Condoleezza Rice in 2006 offered US senators telling testimony revealing the depth of frustration with the toxic influence oil dependence has on America's foreign policy. "Nothing has really taken me aback more, as secretary of state, than the way that the politics of energy is [...] 'warping' diplomacy around the world," she told the senators.
There is thus a growing emphasis on providing alternative options to oil consumers. The race is on to find an alternative. China aims to generate 20,000 megawatts of solar energy by 2020. It is also building six wind farms with a capacity of 10,000 to 20,000 megawatts each.
The Obama administration plans to give $2.3 billion in tax credits to manufacturers of clean energy equipment. At the same time, the US government has awarded more than $2 billion in grants to manufacturers of advanced batteries and other components of electric cars. Flex fuel cars are thus being promoted. The first, and most affordable, is the vehicle that can run on any combination of gasoline and alcohol and even methanol.
Natural gas converted into methanol could also be used to power flexible-fuel cars. Some are also contemplating using electricity as a transportation fuel as it could displace a large amount of oil.
However, diffusion of alternatives could make the transportation less captive to oil in the coming years. Supplying such cars with the (alternative) fuel in sufficient quantities remains a monumental challenge.
Refueling stations would have to retrofit their pumps (today only 2,750 of 170,000 refueling stations in the US offer alternative fuels), a network of pipelines would have to be built to move the fuel from production facilities to the distribution centers and, most importantly, fuel supply would have to increase in spades. Hundreds of new alternative fuel plants will have to be sited, engineered and built, and a gigantic amount of feedstock of various sorts will have to be grown, collected and mined. This massive undertaking will take a long time to mount.
This is a gigantic task. "The Outlook for Energy -- a view to 2030," recently published by ExxonMobil rightly sums up: "The composition of the world's energy sources has evolved over time, influenced by a range of factors that include technology, cost and availability. In 1900, for example, oil and natural gas each accounted for about 2 percent of the world's energy (mix), far behind coal, which accounted for more than 50 percent. Seventy years later, oil overtook coal as the largest energy source, at more than 40 percent, and natural gas grew to nearly 20 percent. By 2000, while oil continued to be the single largest fuel source, natural gas grew at similar levels to coal in terms of global usage, and newer renewable energy sources joined the mix."
Major shifts in fuel type usually take decades (and even centuries) to occur. Turning oil into salt appears a pipe dream, certainly decades away, if not more.
By Syed Rashid Husain
© Arab News 2009
