In my previous blog, I wrote about how the upstream oil and gas industry must be an active part of the solution for lowering carbon emissions, while still producing crude oil and natural gas along with the associated liquids. Whilst the green energy movement is rightly focused on reducing greenhouse gas emissions, the ‘simple’ solution of just eliminating oil & gas production isn’t the answer. Many politicians and environmentalists wrongly assert that we can just replace gas combustion engines with electric engines and that will significantly reduce demand, making oil and gas production no longer necessary. That couldn’t be further from the truth. That shortsighted view is created because their assumptions are not based on facts, but on a misaligned principle that hydrocarbons are mostly needed to power engines. Let’s explore the real reason we need oil and gas production and the importance of oil and gas in world economy and society.
The chart below shows a simple view of what products are derived from oil and gas, and to date, a better substitute has not been found. This chart, taken from ioga.com, shows not just the refined petroleum products that come from oil and gas, but also the dozens of industrial and household items which are dependent upon them to be created. Even if we just focused on the top 5 or 6 products that are created, the list includes items that the world would arguably not be able to replicate or workaround otherwise.
In this list found at The Top 8 Products Made From Crude Oil - iCharts, the world's dependency on oil and gas is one of the key drivers for the world’s economies and the products which enable countries to grow and thrive. Here are the key products:
- Fuel: Gasoline, jet fuel, diesel, and other byproducts like kerosene are the key components for most engines and machinery used in transportation, manufacturing, and many other industries.
- Lubricants: For most machines to work, the parts which rub together must be lubricated in order to work correctly. However, lubricants produced from hydrocarbons are wide-ranging and include everything from grease to cooking spray.
- Paraffin wax: This is really child’s play. Or rather, one fundamental product which most of the children in the world have used at least once. Crayons, wax markers, and their variants are created from this wax. We also get candles, wire insulation, sealants in cans, protection for fruits and vegetables. Products like Vaseline are examples of how paraffin, which comes from oil and gas, is created.
- Petroleum coke: This is a key product used in electric power generation but also in the creation of the next item.
- Asphalt: Also known as bitumen, is both, a refined product from oil and gas but also a naturally occurring mineral. We obviously drive on asphalt roads, but it’s also used to help adhere other materials to surfaces. The shingles we put on our homes are created from this product, but we also use tar and other variants to provide a sealant on these services.
- Petrochemicals: This category is one of the broadest areas of use and really makes daily-use products like cell phones, plastics, clothing, medicine, cosmetics, etc. In fact, even if you only had electric-powered vehicles, oil and gas would still be required to make those vehicles from tires to interior appointments.
- Sulfur: This is a key ingredient for fertilizer and explosives. We also use sulfur to add the unmistakable smell to our gas utility feeds to help alert consumers, if we have a gas leak.
- Propane: This product is widely used for fuel in cars and buses along with basic needs like cooking. Propane storage tanks are used for storage until it’s needed by the consumers.
Until we have suitable substitutes for the above categories, we will continue to need oil and gas production. As you might imagine, the products above are critical to everyone’s daily lives. They demand that we continue to have a strong ability to produce oil and gas and become self-sufficient. Depending on other countries means that they can drive up prices and potentially create product shortages. The upstream oil and gas companies produce these hydrocarbons and sell them to a variety of customers to help drive the creation of the products.
So, it isn’t really an option to stop producing. In my next blog entry, we will start exploring how we can produce these products more sustainably.