Sign up to save your podcasts
Or
Share Whale Oil Lessons Applied To Fossil Fuel Switch (EP.87)
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
Whale Oil Lessons Applied To Fossil Fuel Switch (EP.87)
Summary
The successful, market-driven transition from using whale oil for lighting and lubrication, as well as to make soaps and margarine, can, pun intended, light the way for us today as we deal with transitioning from carbon-based energy to hydrogen-based energy.
For the next 10 minutes, we will unpack these invaluable lessons from history, and apply them to today’s energy transition issues.
Transcript
The successful, market-driven transition from using whale oil for lighting and lubrication, as well as to make soaps and margarine, can, pun intended, light the way for us today as we deal with transitioning from carbon-based energy to hydrogen-based energy.
For the next 10 minutes, we will unpack these invaluable lessons from history, and apply them to today’s energy transition issues.
Pause for definitions: By carbon-based energy, I mean anything that is carbon-based that is used for energy; that one is simple. By hydrogen-based, I mean everything from energy related to that big ball of burning hydrogen in the sky, e.g., wind, tidal and solar, to fuel cells.
As whale oil became more popular, peaking in the mid 1800’s, it became abundantly clear that the dwindling whale population would soon mean that the oil from these animals would quickly become harder to come by, and become much more expensive. It was not an environmental issue, i.e., protecting the various species of whales, that drove the change to another technology; it was simply supply and demand.
John D. Rockefeller, the first billionaire and arguably the richest man who ever lived, started modestly and with a focus on making good, cheap kerosene available. He saw what was happening to the economics of the whale oil industry and came up with a better alternative: kerosene. Note there was no “bubber tax” on whale oil to discourage use, nor was there a federal tax credit for using kerosene. In fact, the government did what it often does best--nothing. The “bonus with purchase” from the development of kerosene was gas, initially simply a byproduct of the kerosene distillation process. And without gas, even Henry Ford could not have revolutionized transportation with the Model T. Once again, government did its part by doing nothing. In exactly the same way, the transition from the horse to the automobile did not require a government tax on horses or a tax credit for buying cars; new technologies, driven by innovation and supply and demand, did the job quite well.
Over and over again, we have seen market driven technologies that have changed our world, and changed it dramatically for the better. Here are just a few examples:
1. Farming technology has allowed the same amount land to feed dramatically more people. 2. Sea transportation has changed from human power to sail to huge crafts driven by massive oil and nuclear powered engines. 3. We went from the Wright Brothers to the Concorde supersonic passenger jet in just over 70 years. 4. In what seems like the blink of an eye, we went from adding machines and typewriters to having powerful computers in everyone's hands. 5. Every smartphone has more computing power than in all of the National Aeronautics and Space Administration had when NASA put a man on the moon.
Why would anyone think that American and world-wide ingenuity and entrepreneurial spirit will not come up with a powerful and effective transition from carbon-based fuels to hydrogen-based fuels? More importantly, perhaps most importantly, solutions derived this way, derived from markets not governments, will be solutions that consumers--you and I--will be willing to pay for because we want them. Market-based solutions represent things that we want, at an affordable price. That’s what drives successful new products and services--and creates successful economies.
View all episodes
By Will LudenSummary
The successful, market-driven transition from using whale oil for lighting and lubrication, as well as to make soaps and margarine, can, pun intended, light the way for us today as we deal with transitioning from carbon-based energy to hydrogen-based energy.
For the next 10 minutes, we will unpack these invaluable lessons from history, and apply them to today’s energy transition issues.
Transcript
The successful, market-driven transition from using whale oil for lighting and lubrication, as well as to make soaps and margarine, can, pun intended, light the way for us today as we deal with transitioning from carbon-based energy to hydrogen-based energy.
For the next 10 minutes, we will unpack these invaluable lessons from history, and apply them to today’s energy transition issues.
Pause for definitions: By carbon-based energy, I mean anything that is carbon-based that is used for energy; that one is simple. By hydrogen-based, I mean everything from energy related to that big ball of burning hydrogen in the sky, e.g., wind, tidal and solar, to fuel cells.
As whale oil became more popular, peaking in the mid 1800’s, it became abundantly clear that the dwindling whale population would soon mean that the oil from these animals would quickly become harder to come by, and become much more expensive. It was not an environmental issue, i.e., protecting the various species of whales, that drove the change to another technology; it was simply supply and demand.
John D. Rockefeller, the first billionaire and arguably the richest man who ever lived, started modestly and with a focus on making good, cheap kerosene available. He saw what was happening to the economics of the whale oil industry and came up with a better alternative: kerosene. Note there was no “bubber tax” on whale oil to discourage use, nor was there a federal tax credit for using kerosene. In fact, the government did what it often does best--nothing. The “bonus with purchase” from the development of kerosene was gas, initially simply a byproduct of the kerosene distillation process. And without gas, even Henry Ford could not have revolutionized transportation with the Model T. Once again, government did its part by doing nothing. In exactly the same way, the transition from the horse to the automobile did not require a government tax on horses or a tax credit for buying cars; new technologies, driven by innovation and supply and demand, did the job quite well.
Over and over again, we have seen market driven technologies that have changed our world, and changed it dramatically for the better. Here are just a few examples:
1. Farming technology has allowed the same amount land to feed dramatically more people. 2. Sea transportation has changed from human power to sail to huge crafts driven by massive oil and nuclear powered engines. 3. We went from the Wright Brothers to the Concorde supersonic passenger jet in just over 70 years. 4. In what seems like the blink of an eye, we went from adding machines and typewriters to having powerful computers in everyone's hands. 5. Every smartphone has more computing power than in all of the National Aeronautics and Space Administration had when NASA put a man on the moon.
Why would anyone think that American and world-wide ingenuity and entrepreneurial spirit will not come up with a powerful and effective transition from carbon-based fuels to hydrogen-based fuels? More importantly, perhaps most importantly, solutions derived this way, derived from markets not governments, will be solutions that consumers--you and I--will be willing to pay for because we want them. Market-based solutions represent things that we want, at an affordable price. That’s what drives successful new products and services--and creates successful economies.