AFTER THE BELL
I love my local oil company … said nobody, ever
One of the phrases of the moment is ‘... said nobody, ever’. For example: ‘You look so great in those Crocs … said nobody, ever’. Or, ‘That’s enough cheese on my sandwich … said nobody, ever’.
One writer in The Guardian described it as an “off the rack punchline”, which is a neat classification. The phrase is a slightly more sophisticated formulation than just adding the word “not”, to the end of a sentence, which I always found irritating because, for a start, it’s an adverb, which sits badly at the end of a sentence, often. It’s also brief, so sometimes you miss the meaning and there is a risk of getting totally the wrong end of the stick.
“… said nobody, ever”, is getting tired very fast, as The Guardian writer Emma Brockes pointed out. Think of the phrases that people used to say a lot until comparatively recently, like “get a room” or “talk to the hand”. These phrases go in and out of fashion.
But before it dies, there is something worthwhile about it, because the phrase investigates the negative space, and that’s always interesting. For example, you can say it about any number of companies. The one I heard recently was: “Facebook is a fabulous partner … said nobody, ever.” When the punches land, they land pretty hard.
Negative space, I think, is much more important than people imagine. I would guess we are probably genetically inclined to take more notice of what is there, as in what is immediately in front of us, rather than what isn’t there.
I was thinking about this in the context of the recent spurt in oil prices, along the lines of: “The world can get by without oil … said nobody, ever.” The recent rise in oil prices would seem to affirm that statement. Yet, you could state the opposite too: “Burning fossil fuels is good for the planet … said nobody, ever.”
We seem to be caught between these two opposite statements. The double-edged sword that is the oil industry really came home to roost this week, with some of the oil companies reporting their second-quarter profits. Exxon Mobil made $18-billion in just three months, while Shell and Chevron each made nearly $12-billion.
It’s easy to castigate the oil companies for making “windfall profits”, but it’s worth remembering that nobody was calling for the oil companies to be granted assistance when the oil price was $21 per barrel back in 2020. The other thing about which there is a huge misconception is that oil companies make “extortionate” profits. It’s true in some cases, and they are currently pretty high, but the big oil companies have gross margins of somewhere between 25% and 30%. Compare that to Apple: gross margin, 43%; Alphabet (Google), 56%; and Amazon, 42%.
For the oil companies, the problem is that “I love oil companies” is definitely something nobody has said, ever. As much as we depend on them, the externalities of using fossil fuels are now so obvious that the reputations of oil companies — which were never that great in the first place — are now solidly in the toilet. Just for a start, the industry is dominated by huge companies, cartels and huge state corporations, and has become a global geopolitical bargaining chip.
Can we hope to ever be rid of the oil companies? The hard answer is: probably not in the foreseeable future. The world used about 89.9 million barrels per day in 2021. The known reserves of oil are about 1.7 trillion barrels. In other words, if no more oil was ever discovered, it would still take half a century to use what we know exists.
Global oil consumption dropped in 2020 at the high point of the Covid pandemic. But my guess is not by as much as people think. Global oil consumption rose every year between 2009 and 2019. The pandemic just took us back to the 2011 level. And from next year on, the gradual rise in global consumption is expected to continue, and is expected to break a new consumption record every successive year from 2023.
What about electric cars? Surely they would make a difference? Possibly, but not as much as is anticipated. About 25% of global oil production is used for passenger cars. The proportion of the industry made up of electric cars is increasing very fast, but it’s still only about 4.5% of the global new-car market.
It’s easy to misread this: if that level doubles every year — unlikely, but we are ever hopeful — it will only take five years for the new-car market to be totally electric. But that still leaves 1.4 billion cars out there that will need petrol to move. And the whole effort will be pointless if electricity to power the cars is generated by fossil fuels, so that change also has to happen.
The other thing people forget about the oil industry is how closely it is allied with the global chemical industry. Oil and gas are the raw material for lots of plastics, just to take one example. One could go on.
Realistically, we are probably going to have to live with the oil industry for a generation. To put it bluntly: “We don’t need oil companies … said nobody, ever.” Actually, lots of people have said that. But sadly, they are probably wrong. DM/BM