A Manhattan Project for Artificial Petroleum

By Carlo Pelanda

Published in “Il Sole 24 Ore”, Milan, Italy, Aug. 17, 2008

(Modified and translated by Marie Plishka)

The perspective tendency remains that petroleum prices will continue to rise due to an increasing demand from emerging countries, even if we occasionally experience prices drops, like in these months. Moreover, producers are nationalizing resources and are increasingly using them for strategic means. To have these energy resources under the control of unstable and authoritarian governments makes importing countries more vulnerable to blackmail. In the past, the system was balanced both by the United States as the global power and by an OPEC inclined to make rational cost/benefit calculations. That is to say, they curbed the price of oil so that it would not drive importing countries into a recession. But America will no longer be a sufficient policing force, even though it remains the superpower, and OPEC has lost its ability to moderate oil prices. The combined effect of these technical and political conditions generated a spike in oil prices since 2005 which has surpassed the extent to which the importing economies can absorb, dangerously destabilizing them due to excessive cost inflation. From this experience, the importing states learned that, besides the contingent fluctuations of the price, the dependency on fossil fuels as it was currently configured would no longer be tolerable. It was an end of an era and the beginning of another. But there is still no precise strategy in this new era, as explained below.

The traditional strategy of controlling the price of energy both through consumer/producer agreements and geopolitical pressure now has less room for implementation at the global level. In fact, such options are only applied at the regional and bilateral levels. For example, Germany will increasingly depend on Russian gas and in 2006 Merkel realigned her country with America to garner more strength in the effort to find a geopolitical compromise with Moscow. Italy pushed for the inclusion of Russia in the western system to secure its access to Russian energy sources. China makes privileged bilateral agreements with single producers. This political path will soften future shocks, but it will not resolve the problem. Rather, it will complicate it with multiple and chaotic competition for securing resources, a phenomenon already seen in the Artic. For this reason, consumer states have made energy independence a top priority. While the mission of energy independence is clear, there is some indecision as to how to proceed. Countries are testing all the possible technological routes: nuclear, solar, hydrogen, wind, energy from natural movements, research for petroleum and gas in their homes. But the energy sources which are called “alternative” to petroleum are in reality only “integrative” and not “substitutive.” Nuclear energy has the potential to be a substitute, but only after a very long time. Most importantly, the transition from an economy based on hydrocarbons to other sources of energy will take centuries.

Hydrocarbons and the new energy sources will have to coexist until a system is in place. The strategy should be that of concentrating all efforts, a sort of new “Manhattan Project”, to both the production of synthetic hydrocarbons from organic material, waste in particular, and to the improvement of biofuels by reducing their current heavy impact in terms of inflation in the food sector and on the environment. The good news, in fact, is that the oil shock stimulated the emergence of new technologies capable of treating organic material by forcing the atoms of carbon and hydrogen to recombine themselves into an artificial hydrocarbon* (synthetic) To conclude, if fossil fuels are the problem, we will make them artificial.

* see www.vuzeta.com