Innovating Oil Companies

The cost of fuel is ever climbing on a perpetual price ladder. The price of gas has doubled in the past decade and will continue to rise at an even faster rate than ever before. Why do gas prices continually swell? Who owns the oil being drilled and pumped from all over the world? Oil is a non-renewable resource owned by oiling companies such as Exxon Mobile, Chevron, BP, and other name brand gas providers.

The prices are skyrocketing because of supply and demand. The world supply of natural oil is being syphoned and used every day at an alarming rate. Oil companies have gotten and are still getting their more than fair share of money for providing these fuels. In fact, these big oil companies have enough money to change their businesses almost over night. So why don’t they, you might ask? The simple answer is that they are stubborn.

Oil companies still see a profit to be made and seem to write off the pollution of machines and burden of the gas prices on every day citizens of the United States and the rest of the world. What am I proposing? Big oil companies have either nothing to lose or everything to lose depending on whether or not they choose to reinvent themselves to support alternative energy or stubbornly decline alternative energy to further pursue Earth’s dwindling oil supply. Let’s take a look at how oil businesses think and what drives their way of thinking.

The supply of oil and natural gas is on the decline, especially for American oil companies. The land in the United States is not abundant with oil. In fact, between 80 and 90 percent of the world’s known oil supply is controlled by countries like Russia, Saudi Arabia, and Venezuela. In 2006, Russia gained rights to the biggest oil field ever discovered — Shtokton. Shtokton is located deep under and ice cap in the Bering Sea. ” Shtokman alone contains sufficient energy to power all of Europe for several years…” (LeVine, 2008).

The Russian oil company that gained rights to this massive oil field did not yet have the technology or know-how to drill it. Thus, Shtokton began operating as super market. Oil companies (including U.S. oil companies) from all over the world flocked to “dip their hands in the cookie jar,” as some would say. This is one way that our oil companies kept making money even though it was obvious that natural oil reserves were running low. Russia was and still is paying foreign oil companies to drill the oil at Shtokton.

Russia also gives the companies a cut of the oil. In essence, our major oil companies have a job, and when they get fired or laid off, our country and others will be in dire need of an alternative resource. Any oil rich country is capable of hiring big oil companies to drill for them in exchange for an oil company minimum wage which consists of a little oil and money. So what does happen when the work runs out or these countries hire someone else for cheaper? The big oil companies start to cannibalize one another in order to keep afloat. Desperate acts have been committed by oil giants in the past few years to keep the money coming in.

In the past, oil businesses have been confused buy petrol-nationalism and needed to buy time until they figured it out. To keep their profits high, oil companies had to start combining and buy each other and other businesses. In 1974, Mobile oil purchased The Container Corporation of America as well as the Montgomery Ward department store chain. Mobile then sold these companies in 1986.

Also in the 70’s, Exxon resorted to making office equipment. Exxon created companies such as Vydec, Qwip, Qyx, and Zilog. Each small company made different things. Vydec specialized in word processors, Qwip manufactured fax machines, Qyx produced smart typewriters, and Zilog made microcomputers. Exxon sold Vydec, Qwip, Qyx, and Zilog. However, all of these companies still exist today. In 1973, Gulf Oil agreed to buy the Ringling Brothers and Barnum and Bailey circuses.

Gulf later changed its mind and in 1984, merged with Chevron. Chevron bought Gulf Oil for 13.2 billion dollars. BP Global went into the animal feeding and breeding business. Texaco purchased Getty Oil in 1984 for 9.9 billion dollars. As you can see, big oil companies have more up their sleeves to make money other than oil. With the push for new ways of powering our machinery with cleaner and more abundant resources, will these big businesses simply buy each other and other companies in order to make it through this trying time, or will they help pioneer technology through to the new age?

We now know that oil companies resort to buying and creating smaller companies in order to keep making money even in difficult times. What if instead of buying container companies, making office equipment, attempting to buy circuses, and buying each other, these businesses created new companies to help fund, research, and develop cleaner, more abundant, or renewable energy technologies.

It is evident that their main prerogative is making money. There is money to be made buy manufacturing and selling wind turbines, solar panels, and alternative fuels such as bio fuels and hydrogen cells. Some oil companies have already begun delving into alternative energy research and production. Chevron is leading the energy reform by slowly switching to cleaner fuels and energies.

A small step that they have taken thus far is to extract natural gas from shale rock. Shale rock is much more abundant than oil found in oil fields reducing the need to drill for oil by a substantial amount. A page on Chevron’s website reads, “An efficient energy source, natural gas is the cleanest-burning conventional fuel, producing lower levels of greenhouse gas emissions than heavier hydrocarbon fuels such as coal and oil,” (Chevron, 2012).

It is estimated that natural gas from shale rock will be at 50 percent of the U.s gas production by 2035. This fuel is still dependent on natural gas, but it is a good step forward in reducing emissions and pollution. Another low emissions energy that Chevron is working with is geothermal energy.

Geothermal energy is heat produced by water that is heated by Earth’s natural heat. Usually, there is a need for an underground, dormant volcano when trying to harness geothermal energy. This is a great energy but is limited to only a few areas around the world with the right conditions. Fuel cells are being researched by Chevron to act as self contained batteries. Fuel cells produce less greenhouse gases than burning fossil fuels, and a direct byproduct of a fuel cell is pure water. Fuel cells convert hydrogen into electricity.

However, hydrogen is not found readily in nature. The extraction of hydrogen from other substances is required, so fuel cells are not completely self sufficient. These fuel cells are already being used in things such as electric cars and homes. Chevron is also leading the way in the research and development of biofuels. Biofuels are fuels synthesized from living organisms. There are three different types of biofuel — First, second, and third generation. First-generation biofuels are created mostly from non-toxic sugars and starches.

Second-generation biofuels are created from non-edible plant materials. Lastly, third-generation biofuels are made from algae and other microscopic organisms. Biofuels are created using previously living organisms, which means we could potentially grow our own fuel. Perhaps the biggest thing Chevron is doing in its energy movement is producing and testing solar panels. One of Chevron’s solar panel testing grounds is actually on and old oil refinery. Leslie Klinchuch expresses her enthusiasm on saying, “It’s neat to be able to reuse and repurpose the property for something as exciting as solar energy,” (Chevron, 2012). Solar panels are made from silicon alloys. However, they are the most efficient renewable energy to date. Chevron has many huge solar projects around the country.

Chevron solar sites in California alone include the East Side Union High School District which saves the district an estimated 43 million dollars and its carbon dioxide emissions by more than 4,900 metric tons, the Contra Costa Community College District which is expected to save the district over 70 million dollars over the next 25 years, and Project Brightfield which uses an oil refinery to test new and improved types of solar panels. Chevron is not the only oil giant trying to turn over a new leaf.

Exxon Mobil teamed up with Synthetic Genomics in 2009 to invest heavily in the research and development and algae-based biofuels. Coincidently, Synthetic Genomics in also working with BP in the research of microbial-enhanced hydrocarbon recovery. The development of algae-based biofuel comes with great advantages.

Algae can be grown in conditions unsuitable for first and second-generation biofuels, consumes carbon dioxide which provides greenhouse gas mitigation, produces bio-oils that are very similar to petroleum on a molecular level, has the potential to yield up to three times more biofuel than other types per acre, and grows faster than other plants. Exxon Mobil also provides lubricant for wind turbines which drastically increase their life spans. There are endless possibilities for oil businesses that want to join the movement toward cleaner energy.

In his article, The End of Big Oil, Steve LeVine suggests, “Ultimately, the only big oil company left standing in 20 years may be the one that wholly re-invents itself” (LeVine S., 2008). There has been a tremendous push for clean, renewable energy in the past decade.

This push is far too big not to be the future. The most commonly talked about expense could almost cease to exist if clean and renewable energy is integrated into our society. Will the stubbornness of the oiling business continue and put more financial burden on the people or will they chose to change their ways and businesses in order to improve the world as a whole? Big oil companies have a choice to make — Continue to go down with the ship they have been patching for years or reinvent themselves as something completely new that could change the world forever.


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