I hear where the oil industry is having a lousy time of it lately. And I don’t mean “vegetable oil”. (But we’ll come back to vegetable oil in a moment.)
On August 31, Exxon Mobil, once the largest publicly traded company in the world, was dropped from the Dow Jones industrial average after serving as a noble indicator of our nation’s financial health since 1928. Its replacement on the well-respected index: software company Salesforce.com.
Exxon Mobil was the longest-serving member of the Dow’s 30-company index, when the ax fell… except that they were called Standard Oil back when they first joined the team. (General Electric, the only company that had been on the index since its creation in 1896, got the boot two years ago.)
Exxon is not alone in having oily sand kicked in its face. In the 1980s, energy companies comprised about a quarter of the Dow. With Exxon getting kicked down the stairs, one lone energy company remains, accounting for just 2% of the weighed index: Chevron. Folks who’ve been monitoring the situation, like for example the Washington Post, have pointed out that five major tech companies — Alphabet, Amazon, Apple, Facebook and Microsoft — are each worth more than the top 76 energy companies put together.
Things were getting hairy for the oil companies even 10 years ago, but the COVID pandemic was a dumpster fire. People stayed home, even worked from home. Business patrons stopped flying in airplanes to big conventions in Las Vegas. Families turned down the thermostat and started sleeping with the dog.
They could have seen this coming. Since 2015, over 200 oil and gas companies in North America have filed for bankruptcy. Twenty oil and gas companies defaulted on their debts last year — before COVID was even a word — and 18 have already done so this year. Exxon Mobil reportedly faces a deficit of $48 billion through next year, after suffering its biggest loss ever — almost $1.1 billion — between April and June.
Struggling American families have been selling their cars and TV sets to get through the pandemic, but Exxon and the rest of the oil companies can’t sell their assets, because the only corporations that might buy their assets are already pleading in bankruptcy court.
This might not seem like much of a humor article, so far. Oil companies going bankrupt; that’s not really funny. But I’m sorry, it is funny. As in ‘ironic’. These were the guys who practically forced us to build out Suburbia miles away from anything interesting, and then buy big, gas-guzzling SUVs and go driving around, looking for something interesting. (Walmart was not really that interesting, as it turned out, but it was all we could find.)
And I’m sorry, because it is funny — as in ‘ironic’ — because we all bought into the dream of endless, cheap oil, oblivious to the invisible carbon dioxide we were injecting into the atmosphere.
Which brings me to vegetable oil.
As we all know, crude oil pumped out of the ground is a mix of various hydrocarbons — methane, propane, hexane, octane, benzene, and so on — plus sulfur, and minor amounts of vanadium, iron, arsenic, lead and other metals… and various other impurities. The hydrocarbons are useful for energy; the impurities are simply annoyances to be removed in the refining process. Ideally, we would end up with pure hydrocarbons to dump into our gas tanks… but the world is never ideal.
Vegetable oil is a different kind of animal… as we all know. Although it’s slippery like petroleum, it’s actually made up of triglycerides, which contain oxygen as well as hydrocarbons. Basically, vegetable oils are glycerol molecules esterified with fatty acids.
We don’t want to put triglycerides in our cars, generally speaking, (although some diesel engines can be modified to burn vegetable oil). So the best thing to do with vegetable oil is to eat it. On a salad, perhaps. Or in a Chinese stir-fry. Or soaked deeply into some potato chips or French fries.
There’s a good reason why ‘fatty acids’ got that name. They make you fat. And there’s a very important quality of fat: it doesn’t transmit heat. That means that fat works as ‘insulation’, and the more fat you can tuck into the nooks and crannies of your body, the better your body will stay warm, when it’s cold.
Friends, when the oil and gas companies stop making their deliveries, we’re all going to need some way to stay warm.
Underrated writer Louis Cannon grew up in the vast American West, although his ex-wife, given the slightest opportunity, will deny that he ever grew up at all.