Dirty Little Secret

So it’s not like this information isn’t out there… it’s available for anyone who is brave enough to investigate. Top People (which people? “Top People”) are aware of this and now I will perform my moral duty and inform the “bottom” (“middle” if you prefer) people.

I’ll start by introducing a very simple business concept. Do not base your business on obsolete technology. Pretty straight forward – this also means, don’t base a business on a resource that is on its way to becoming extinct. A business that uses Dodo Bird feathers to stuff pillows might have difficulty, as they have been extinct since the mid-1600s.

So what’s the secret? Well – did you know the last new Oil Refinery was built in the United States back in 1976? With oil becoming so expensive and the need becoming so high… why aren’t they building anymore?

It appears to be “big business” – with approximately 27% of what we pay at the pump going to refining (just heard this morning that we are at $3.00 a gallon here in San Francisco and this morning a barrel of oil hit $68), so why aren’t they cranking out the refineries? Perhaps it’s the same reason many oil companies are not replacing their retired oil tankers… they know it’s a dead-end business.

Harsh reality, we have about 40 years of fossil fuel left (if that)… period. Now maybe this is a secret like "Uncle Joe is a lush" or "Cousin Harold is gay"… we all knew it… but now we have to face it.

Technology might allow us to find oil quicker, extract it more efficiently and process it more inexpensively – but investments towards that technology have no long term benefits. Why would you invest in a business where the key component was running dry? You wouldn’t – its bad business.

They knew back in 1964 that the worlds demand on oil would overwhelm the available supply. By 1986 more oil had been consumed daily than was being discovered (almost twice as much). We have been warned – but damn it, we like to burn fossil fuel. So I say “go for it”, burn it all up – indulge. If nothing else, humans adapt. Once Supply and Demand becomes frenzied with the finality of it all, and prices reach ranges outside most individuals’ ability to pay – then perhaps people will take this seriously.

Oh, one more thing – I don’t want to hear about “electric cars” and hybrids as the answer to our problems. I’m all for electric cars… to drive around town. But I don’t see an electric commercial airliner taking 300+ passengers across the Atlantic. So if you have children… I encourage you to take them on a trip to another country now, because when they get older, all flights may be cancelled.