Oil is one of the most important commodities in the world playing an important part in some of the biggest industries like chemicals, transport, power, petrochemicals etc. The high energy density and easy availability have made mankind almost completely dependent on oil for most of his needs. Almost all of the world’s cars run on petrol /gasoline which is derived from crude oil. Despite new evidence that burning oil leads to massive pollution and greenhouse warming nothing had been done to prevent its usage growth. In fact each year billions of barrels of oil are burned to power cars, ships, trains etc. Some countries use oil to power electricity as well though that has been decreasing as oil prices have increased substantially in recent years.
The massive oil dependency has been decried by politicians for a long time but little has been done to reduce it. Powerful oil lobbies run by massive industrial conglomerates like Exxon, Chevron, BP etc. have managed to kill legislation which would reduce the subsidies to the fossil fuel industry. The BP Oil Spill after creating a massive hue and cry has faded from the public mind and its now business as usual for the Oil Industry. The only way Oil usage can be reduced it seems is when the world runs out of oil and the prices become too high for most people to use it.
Also Read on GWI List of Oil & Gas Companies in India.
Advantages of Oil
1) High Energy Density – Oil has one of the highest energy densities which means that a small amount of oil can produce a large amount of energy. This makes it very useful as its high energy density has made it the preferred choice for use as fuel in automobiles.
2) Easy Availability, Infrastructure for Transport and Use – Oil is widely distributed in almost all parts of the world. Also there exists a massive infrastructure to transport oil to other places through ships, pipelines and tankers. This means that oil is available throughout the world.
3) Crucial for wide variety of Industries – Besides Transport,Oil is a critical component in a wide variety of other industries. It is difficult to think of a commodity which has such a huge role to play in a wide variety of human products from Vaseline, cloth, medicines etc.
4) Easy to Produce and Refine – Oil is not very difficult to produce though most of the low cost locations have already been depleted. Now Oil is being mined off the coasts in seas and also tar sands. Oil Refinery Technology is also quite old and mature which implies that refining of oil to get valuable products like diesel, petrol is also quite easy.
5) Constant Power Source and Reliability - Unlike solar and wind energy, oil can produce power 24/7 and is highly reliable. Oil engines are a mature technology and highly reliable to work with.
Disadvantages of Oil
1) Greenhouse Gas Emissions (GHG) – One of the biggest Disadvantages of Oil is that it releases Carbon Dioxide which has been sequestered for millions of years in the dead bodies of plant and animals. This transfers the Carbon from the Earth to the Environment leading to the Global Warming Effect. Global Treaties have failed in putting a Cost on this, though individual countries are tying to account for this through Carbon Taxes and Cap and Trade.
2) Pollution of Water and Earth – Oil Spills have caused massive pollution of water bodies as massive oil supertankers lead oil. This leads to the death of thousands of animals and fishes every year beside devastating the local ecology. The BP Oil Spill caused billions of dollars in losses and even to this day small Oil Spills keep happening.
3) Growth in Terrorism and Violence – Oil is drilled in some of the worst dictatorships like Saudi Arabia, African countries. This Oil Money goes directly into the hands of these despots who have amassed trillions of dollars. They give rise to violence and growth in terrorism as this oil money is used to fund these organizations. Osama Bin Laden comes from one of the richest Saudi families. However the powerful Oil Money also manages to suppress the voices of protest.
4)Emission of Harmful Substances like Sulfur Dioxide, Carbon Monoxide, Acid Rain - Oil Plants emit harmful substances such as Sulfur Dioxide which cause health hazards among the surrounding population and Acid Rain. While modern equipment has reduced the emission of these harmful substances, it is still very harmful to humans.
5) Leads to production of very harmful and toxic materials during refining, Plastic is one of the most harmful substances – Oil exists as a mixture of hydrocarbons with traces of sulfur and other compounds.
Oil Companies are coming under increasing fire in the aftermath of the BP Oil Spill which has exposed a lot of skeletons in the Fossil Fuel Closet. British Petroleum has already been exposed for the lies and deception with even the US regulators coming under criticism for lax regulation. The Oil Industry instead of owning responsibility has acted in a most shocking manner with Drilling Operator Transocean trying to escape responsibility behind a 150 year old law which caps liabilities at a measly $27 million.Even Oil Companies unrelated to the disaster, Exxon and Chevron are facing tough questions about the validity and morality of their Billions of Dollars in Windfall Profits. The super rich Oil Lobby seems quite helpless in the face of the public anger generated against the roughshod environmental treatment by Big Oil.
Contempt Towards Environment by Big Oil
These companies will find out that trying to fight back (like the Financial Industry) against public opinion might backfire for them. Oil companies like BP,Exxon have for a long time completely disregarded their responsibility towards the society. BP despite being a leading solar producer has recently closed its factories in the US while Shell has abandoned plans for investing in offshore wind. The lame excuse given each time is economic unviability even as other companies continue to make huge investments. Even shareholder fury in the past has failed to move the Oil Companies to invest more in Renewable Energy.
President Obama has said that the Oil Spill will change the shape of the Energy Industry just like the 9/11 Terrorist Strike. However the Oil Industry is much bigger and essential to society to be changed radically in a short time. However, if long term incentives and policies are changed, then this Environmental Disaster might have a Silver Lining after all. There are already calls by some Senators to redirect the huge fossil fuel subsidies in the US and Louisiana has already passed bills supporting Renewable Energy.