Special Section: The Value and Future of Petroleum Engineering
In 1798, Thomas Malthus, an English cleric and scholar, published An Essay on the Principle of Population. The central thesis was that population would grow exponentially, while food production would do so linearly, leading to catastrophic famine beyond the cross-over point. He did explore interventions on population growth, but the linearity of food production was not seriously challenged until a century later.
In 1909, Fritz Haber invented a means to produce industrial-scale ammonia (later perfected in collaboration with a BASF colleague, Carl Bosch, yielding the Haber-Bosch process) by reacting hydrogen from natural gas with nitrogen from the air. For this he received the Nobel Prize in 1918, although not without controversy due to his wartime role in the production of chlorine as a chemical weapon. Ammonia-based fertilizer, primarily in the form of ammonium nitrate and urea, transformed agricultural production, resulting in complete avoidance of the “Malthusian catastrophe.” This was the first dramatic contribution of the petroleum industry for the betterment of the human condition.
For sheer impact, in touching the lives of virtually everybody on the planet, Haber-Bosch is hard, if not impossible, to beat. While food (together with water) is arguably the most important human need in terms of sustaining life, affordable energy is an important determinant of the quality of that life. Low-cost energy is the tide that lifts all boats of economic prosperity. Innovation in the petroleum industry has, in the past decade alone, created widespread low-cost energy that appears to be here to stay.
It began with shale gas. The first decade of this century saw wild fluctuation in the price of natural gas. Few parameters dampen the enthusiasm for capital investment more than uncertainty in the price of key consumables. Unlike oil, gas pricing is regional. The chemical industry fed by natural gas, such as methanol production, fled from the US to countries with cheap gas. Then, a combination of the technologies of horizontal drilling and hydraulic fracturing led to the exploitation of gas in geologies previously considered intractable: shale gas deposits. An explosion of drilling resulted in gas priced under $3/million BTU. The volumes eliminated the need for imported liquefied natural gas (LNG). In fact, the US became an exporter of LNG. The net effect was that natural gas prices dropped and stabilized worldwide, although at higher levels than in the US. And increased availability of LNG in Europe resulted in gas no longer being considered as a potential weapon of political will.
Shale gas single-handedly accounted for the emergence of the US from the last recession. Natural gas is either a critical raw material (e.g., for ammonia or methanol synthesis) or is a source of energy for a reaction such as in steel making. Cheap and plentiful natural gas catapulted the growth of the associated industrial processes.
