With job losses, inflation, energy price fluctuations and the stock market fluctuating, who isn’t aware of the troubles our economy is going through. With this post I hope to give a basic overview on how intertwined our economy is with oil and how it is causing turmoil in our society today…
Since the industrial revolution, oil has increasingly become the lifeline of our economy. Now over 150 years later we have become fully dependent on oil in ever aspect of our lives. It is completely crucial to think about oil as more than just gasoline for your cars. Oil is transportation fuel, but oil is also plastic, electricity and a key component of pharmaceuticals. Once you start thinking about everything that oil is used for and what aspects of your life it plays an important role in, you see that we have become completely and totally dependent on oil in everything we do in our modern lives. I have just briefly listed a very minute list of how we rely on oil but lets get into how our society needs oil to survive.
In the early 1900′s mass production of the automobile was introduced by Ransom E. Olds and further perfected by Henry Ford. This opened the door for a completely new way of transportation for the common person. This increased the demand for oil in the transportation sector not only because of the gasoline that was used, but now the demand for nice smooth roadways existed. Construction and upkeep of our transportation system demands large amounts of energy to produce road materials like concrete and asphalt. As vehicles became larger and more accessible, this required the transportation infrastructure to also become larger. With the improvement of the transportation infrastructure people began living farther away from cities, which increased distances normal people had to travel on a day-to-day basis. All of this added to an increased demand in oil.
This is only the beginning of our dependence. As oil became more available, it was given more uses because it was relatively inexpensive. Oil was used to power our developing cities in several ways; it could be burned in order to generate electricity and was also used by the coal mining equipment. Coal is the largest source of electricity generation; unfortunately a large amount of diesel fuel, which is derived from oil, is used during the coal mining process. As the demand for more and more consumer merchandise rose, so did the need for electricity generation. Unfortunately electricity is not the only use of oil that rose as consumer goods began to be mass-produced.
Mass production requires that oil be used in several different stages of the production process of consumer goods. Some of these consumer goods and services are: plastic products, aluminum, steel, fabrics, medicines, household cleaning products, package delivery (like UPS or FedEx), vehicles, makeup and food. For a more detailed example let us look at a simple loaf of bread and see how something that is so common consumes oil in the production and delivery process.
Bread’s common ingredients are water, flour, oils like soybean oil and extract from corn and barley, which are just a few ingredients from whole wheat Wonder Bread. Now look just at the main ingredient listed above, flour, which is produced from grains. Grains are grown in fields using large farm equipment like tractors. In order to ensure that the farmer gets a larger plentiful crop, petroleum based chemicals are used to kill off foreign plants using pesticides. Then these grains are harvested, with a combine, and then trucked to a grain elevator where the crop is stored and eventually sold. While at the grain elevator the crop may need to be dried, so large dryers that run on an oil supported energy source dry the crop. When the crops are sold, the grains are then shipped, either via rail or truck, to a manufacturing plant to be made into flour. These modern flourmills require an oil supported power source in order to operate. After the grain is ran through the mill and turned into flour, the flour is then packed (probably some petroleum based packaging used here) and delivered to the bread company. Again this flour is delivered by either truck or rail. Once the bread company gets the flour it then processes it in a manufacturing plant that is powered by some sort of oil based power source. The bread has to be baked in hot ovens (more oil usage). When baking and quality control is done the bread will end up in a plastic bag (plastic is made from oil in a manufacturing plant powered by oil, supplied by semi-trucks and/or trains with necessary materials to make plastic). Now the bread will be shipped to different distributors, restaurants and shopping centers. Now I know that this is a rather long drawn out paragraph that doesn’t have an overly exciting topic, flour, but I hope it helps you see how even with something as simple as a loaf of bread, oil is needed every step of the way.
I didn’t get into as much detail as I could have when talking about the flour to bread example. Pick something, anything, and think about how the object you choose used oil in some form in order for it to be what it is. I think it could be shocking and possibly even scary to see that we have allowed ourselves to become totally and completely dependent on a finite source.
So are we in trouble if we continue our ways? It is fairly safe to say that oil production has peaked (based on Dan’s previous blog post) and as the production of oil continues to drop there will be less available energy for the world to use. If the economies of the world are healthy, lowered oil production will mean higher energy prices but if the economies of the world are not healthy then we could experience lower energy prices. If there is less energy for the world to use then how is an economy based on consumerism going to fair? Consumerism is based on the consumption of goods which dictionary.com defines as “the using up of goods and services having an exchangeable value.” Our economy has been weakening and in return oil demand also has been shrinking, this is why we experiencing these low oil prices. The economy isn’t the problem; the total reliance on oil and fossil fuel based energy is the problem. We cannot expect to improve the economy if we continue to be completely reliant on oil and until that begins to change, we will continue to experience an unpredictable volatile market and economy.