No one is arguing with the fact that oil and gas are one of the most critical commodities in our world. Nearly 100% of transportation on the globe depends on oil and gas for fuel. Even among electric cars, very few are charged with a renewable source, such as solar or wind power. Electric cars that are charged through a plug in the wall connect to the electric grid, which uses gas to create electricity. Beyond transportation, all of our agriculture, manufacturing, and most of our heating and food preparation relies on gas. About one-third of all of the energy humans use comes from oil and gas.
Despite the fact that humanity wouldn’t survive more than a few months if all of our oil reserves dried up, the oil industry tends to be one of the most villainized industries in our world. Here are three common misconceptions about the oil and gas industry that perpetuates the stigma:
- Renewable energy could replace the oil industry if it wasn’t such a money maker.
We all want renewable energy to grow so that one day we don’t have to depend on fossil fuels to exist. However, even with our best efforts, we will not have a renewable source that could take the place of oil and gas in our life time. The exponential growth of wind and solar energy in the last few years haven’t even put a dent in our dependence on gas. Currently, we use about 1,500,000% more gas and oil in a single day than we do renewable energy. We’ll have a reliable source of renewable energy one day; but that day isn’t going to come in this decade or the next because the technology doesn’t exist yet, not because of a conspiracy.
- The oil and gas industry is riddled with fatal accidents.
Here is a statistic that will surprise you. According to OSHA, there are more occurances of fatal accidents in teaching and real estate careers than the oil and gas industry. The days when the guys on an oil rig didn’t know if they’d make it home faded as improved technology accomplished the most dangerous jobs and safety became the utmost priority throughout the industry.
- Oil and gas makes the world’s richest even richer.
Oil companies actually don’t make a lot of money. What money is generated is spread very thin among the numerous entities required to produce it. The oil production industry could be divided into three sectors: upstream gas and oil, midstream, and downstream. Upstream gas is the exploration and production and cost billions of dollars. It is estimated that 50-90% of upstream gas efforts result in failure. The next phase is midstream, the storage and transmission of fuel. Finally, the downstream sector refines and distributes the oil and gas. Of these categories, there is no cash in hand until downstream sector is reached. At this point, billions of dollars in costs have been incurred. After that, oil and gas companies might see a profit margin of 8-10% if gas prices are up. Throughout the 90s, when a gallon of gas went for less than a dollar, oil companies ran on a deficit.