BLOG POST

Tectonic Shift

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Ten years ago, a lobbyist in Washington, D.C. told me that if she were to suggest in public that petroleum might be a finite resource, she would be “laughed out of the room.” 

Recently, Scott Vitters, general manager of Coca-Cola's PlantBottle initiative, told the Los Angeles Times, “With crude oil, you're talking about a finite resource. We're making a long-term bet that the price of oil isn't really going to go down.”

Major manufacturers are acknowledging that the era of “cheap oil” is over. 

As the LA Times noted this week, manufacturers are increasingly choosing plants over petroleum for their raw material needs. Ford is using soybeans to make seat cushions. Coke and Pepsi are using sugar cane to make bottles and packaging. McDonalds is moving away from petroleum-based cups and instead trying out paper. Across a wide range of industries and products, manufacturers are beginning to replace petroleum with renewable resources in a serious way.

Cost is driving the trend. As Frontier Group noted in our 2005 report Making Sense of America’s Oil Needs, and earlier in our 2001 report A New Energy Future, the world is having an increasingly difficult time producing enough oil to satisfy rising demand. As a result, the U.S. faces a future of unstable fuel prices in the short term. In the long term, oil will become increasingly expensive.

As oil demand outpaces supply, petroleum dependency (whether for packaging, manufacturing, agriculture, electricity, or transportation) will at best pinch profit margins, and at worst lead to scary shortages.  Long term, economic security is only possible if we get off oil.

It’s great that this not-so-new reality is motivating reductions in petroleum use by large manufacturers.    The shift from an underlying paradigm of material abundance (“use it up, we’ll get/make more”) to one of resource scarcity is long overdue; had modern society had more foresight, the concept of trash would never have been invented. And it’s worth noting that, while materials substitution can help abate our need for petroleum, sustainability cannot be achieved unless we all use less resources in the first place.

Manufacturing is not our biggest oil suck. To get off oil we’ll need increased energy efficiency, renewable energy, better transportation options, new vehicles that run on electricity or biofuels, and we’ll need to direct development away from sprawling growth patterns.   So, while we will keep pointing out how government policy can move behaviors in a helpful direction, we’re going to need a few more industries to jump on the “finite resource” bandwagon, soon.