In the wake of the Macondo well blowout, we are hearing renewed claims that we must quit using oil, that we must win “the oil end game.” In addition, there are the continuing calls for drastic reductions in carbon-based fuel consumption, and those calls are being amplified thanks to the drought and record-setting heat that has affected parts of the globe in recent weeks.

Those calls may be heartening to some of the true believers that oil is bad, coal is bad, and natural gas is only slightly less bad. But here’s the reality: energy transitions are protracted affairs, occurring over decades, or even centuries.

For instance, the fuel source that has had the longest reign in the American energy business is plain old firewood. Wood’s reign as the most important fuel in the United States lasted longer than any other. For 265 years after the Pilgrims founded the Plymouth Colony, and for 109 years after the signing of the Declaration of Independence, wood was the dominant source of energy in America. It wasn’t until 1885 – the year that Grover Cleveland was first sworn in as president – that coal finally surpassed wood as the largest source of primary energy in the US.

For the next 75 years, coal was king. During the first two decades of the 20th century, coal was supplying as much as 90 % of all the primary energy in the US, fueling factories, heating homes, and providing boiler fuel for essentially all of the nation’s electric power plants. But coal’s dominance was not to last. Thanks in large part to the booming demand for kerosene for lighting and more particularly, for gasoline to fuel automobiles, oil began whittling away at coal’s market share.

World War II was a turning point. The massive production of airplanes, ships, and motor vehicles during the war years accelerated the demand for oil. And prolific oilfields in Texas and Oklahoma were ready and able to provide nearly all the gasoline and diesel fuel that consumers and industry wanted. Between 1945 and 1950, the number of cars on US roads increased by 60%. Over the next ten years, the US auto fleet grew by another 50%.(1) The increasing mobility of the average American resulted in a huge increase in demand for oil. In 1949, coal accounted for about 37.4% of the US primary energy market, with oil trailing close on its heels with a 37.1% share. But in 1950, oil hit the tipping point, surpassing coal as the biggest source of US primary energy. And for the last 60 years, oil’s primacy has not been challenged. In fact, in 2008, oil’s share of the US energy market was at the exact same level as it was back in 1950: 38.4%.(2)

While oil has been the undisputed champion, the jockeying for second place has been ferocious. In 1958, natural gas sped past coal to become the second-largest source of primary energy in the US. And gas kept its second-place status behind oil for nearly two decades. By 1971, the US was consuming nearly twice as much energy in the form of natural gas as it was in the form of coal.(3) But Congress and federal regulators decided that the market couldn’t be trusted. And thanks to their ham-handed interventions, coal rebounded in a big way. In 1986, coal overtook natural gas to re-claim second place in the US primary energy market. Since then, coal and natural gas have been running neck-and-neck with each claiming about 25% of the US primary energy market.

Source: EIA(4)

The decades-long jousting for primacy among the various hydrocarbons provides more evidence for just how difficult it will be to replace them. As Vaclav Smil explains in his 2008 book, Global Catastrophes and Trends, there’s no reason to expect that the transition toward renewable sources like solar and wind will be done quickly. In fact, he says to expect the opposite:

There is no urgency for an accelerated shift to a nonfossil fuel world: the supply of fossil fuels is adequate for generations to come; new energies are not qualitatively superior; and their production will not be substantially cheaper. The plea for an accelerated transition to nonfossil fuels results almost entirely from concerns about global climate change, but we still cannot quantify its magnitude and impact with high confidence.(5)

Furthermore, the longer we use hydrocarbons, the more entrenched they become in our way of life. And the more energy we produce with hydrocarbons, the more energy we are able to produce. That may sound like hyperbole, but it can be easily understood by looking back at the history of the coal business. The first railroads were built to haul coal, and the locomotives that hauled the coal, burned coal. As author Jeff Goodell writes in his book Big Coal, the railroads were a key invention that led to more coal production because, “In effect, coal hauled itself.”⁶ Of course, the railroads were only part of the equation. By perfecting the steam engine, James Watt enabled British mines to produce coal more economically because his engines pumped water and lifted coal out of the mines.(7)

The idea that hydrocarbons beget more hydrocarbons can also be seen by looking at the Cardinal coal mine in western Kentucky. The mine produces more than 15,000 tons of coal per day. And the essential commodity that facilitates the mine’s amazing productivity is electricity. The massive machines that claw the coal from the earth run on electricity provided by power plants on the surface that burn coal. In fact, about 93% of Kentucky’s electricity is produced from coal.(8) To paraphrase Goodell, at the Cardinal mine, the coal, in effect, is mining itself.

Hydrocarbons are begetting more hydrocarbons in the oil and gas business. Modern drilling rigs can bore holes that are five, six, or even eight miles long in the quest to tap new reservoirs of oil. And the energy they use to access that oil is…oil. Diesel fuel has long been the fuel of choice for drilling rigs around the world. On offshore drilling rigs, the power is often supplied by diesel fuel. But in some cases, the power is provided by natural gas that the rig itself produces. In those offshore platforms, the natural gas is, in effect, mining itself.

The transition away from oil, coal, and natural gas will be a decades-long process because the companies that produce those commodities are getting ever-better at finding and exploiting them. The oil and gas industry provides a clear example of this. For about a century, analysts have been forecasting an end to the supply of petroleum. And they have consistently been proven wrong. Why? Because the companies that produce oil and gas continue innovating.

While environmental groups and energy analysts publicize the inventiveness of entrepreneurs working to improve wind, solar, and other alternative sources of energy, they seldom mention the ongoing innovations that are occurring on the hydrocarbon side of the ledger. And in doing so, they frequently forget the sheer size of the industry that is constantly searching for techniques that can get oil and gas out of the ground and do so faster and cheaper.

In the US, there are about 5,000 independent oil and gas companies, every one of which is continually spending money and testing new concepts that will wring yet more petroleum and natural gas out of their leases.(9) In 2007 alone, those companies spent $226 billion drilling and equipping some 54,300 wells.(10) And that doesn’t include the money spent on research and technology. All of the money spent on drilling and outfitting those wells, and the investment those companies have made in research and development, helps assure that the installed fleet of machinery that supplies us with horsepower will continue to be fueled primarily by hydrocarbons.

It was only six decades ago that the oil industry drilled its first offshore oil well – the Kermac 16 – out of the sight of land.(11) And that well was drilled in just 20 feet of water.(12) Today, Anadarko Petroleum is producing natural gas at the Independence Hub in the Gulf of Mexico where the water depth is 8,000 feet, and that one platform provides enough natural gas to supply about 5 million homes.(13) And the companies that are drilling for oil around the world are continually pushing into ever-deeper waters. In 2003, Transocean, the world’s largest offshore drilling contractor, announced that it had drilled a well in 10,000 feet of water.(14) Five years later, Transocean announced it had drilled a well off the coast of Qatar with a horizontal section that extended some 6.7 miles. The total measured depth of the well was 40,320 feet (7.6 miles), making it the longest extended-reach well ever drilled.(15) But that record will almost certainly be eclipsed in the next few years as Houston-based Parker Drilling has recently completed the design and construction of a rig that will be capable of extended-reach wells with lengths of up to 44,000 feet, or 8.3 miles.

Conceiving of an eight-mile-long well boggles the mind, particularly when you recall that the Daisy Bradford No. 3, the well that started the flood of oil development in the East Texas Field, was only 3,500 feet deep.(16) But by drilling deeper and faster, and in locations that were previously thought to be uneconomic, the oil and gas industry has continually extended its life expectancy.

In the natural gas sector, recent breakthroughs in shale gas technology have unlocked vast quantities of methane. Over the past five years, US shale gas production has soared thanks to techniques like micro-seismic analysis, horizontal drilling, and enhanced well completion. The ever-increasing use of technology in the oil and gas business has resulted in huge improvements in drilling success rates. For instance, the success rate today for “wildcats” (wells drilled in frontier areas) is 50% or better. Three decades ago, that success rate was about 10%.(17)

While the oil and gas industry continues to improve the techniques that allow companies to drill wells deeper, faster, with greater precision, at ever-lower costs, the coal industry continues to show its resilience. Although oil passed coal as the most important source of US energy back in 1950, coal hasn’t gone away. In fact over the past few years, thanks to soaring global demand for electricity, coal has enjoyed a resurgence. Although we now live in the Age of Oil, the Age of Coal hasn’t yet passed. The reason for coal’s enduring popularity is that it provides huge quantities of the essential commodity of modernity: electricity.

Over the past two decades, global electricity consumption has grown faster than any other type of energy use. Since 1990, electricity use has increased about three times as fast as oil consumption. In their thoughtful 2005 book, The Bottomless Well, Peter Huber and Mark Mills declare that “Economic growth marches hand in hand with increased consumption of electricity – always, everywhere, without significant exception in the annals of modern industrial history.”(18)

Electricity is the energy commodity that separates the developed countries from the rest. Countries that can provide cheap and reliable electric power to their citizens can grow their economies and create wealth. Those that can’t, can’t. The essentiality of electricity takes us back to coal. Love it or hate it, coal provides the cheapest option for electricity generation in dozens of countries around the world. In heavily populated developing countries like China, India, and Indonesia – all of which have large coal deposits – the need for increased electric generation capacity is acute. And those countries (India and China in particular) will continue using coal until they can ramp up their nuclear power sectors.

So, yes, the calls to move away from carbon-based fuels are loud and frequent. But facts are better than dreams. And a look back at history shows that coal, oil, and natural gas are going to be with us for a long time to come.

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(1) US Census Bureau, Historical Statistics of the United States, “Series Q 148-162, Motor-Vehicle Factory Sales and Registrations, and Motor-Fuel Usage: 1900 to 1970,” 716.

(2) BP Statistical Review of World Energy 2009.

(3) EIA data. Available: http://www.eia.doe.gov/emeu/aer/txt/ptb0103.html

(4)EIA data. Annual Energy Review 2008, Figure 5. “Primary Energy Consumption by Source, 1635-2008.” Available: http://www.eia.doe.gov/emeu/aer/ep/ep_frame.html

(5) Vaclav Smil, Global Catastrophes and Trends, 90.

(6) Jeff Goodell, Big Coal, 75. He reports that the first significant rail line was built in the British coal town of Darlington to carry coal to the port at Stockton.

(7) Peter Huber and Mark Mills, The Bottomless Well, 4-5.

(8) American Coalition for Clean Coal Electricity. Available: http://www.cleancoalusa.org/docs/state/

(9) Jalal Torabzadeh, “A Message from the Chair,” Los Angeles Basin SPE Section Newsletter, June 2009. Available: http://www.laspe.org/newsletters/june09nltr.pdf

(10) Advanced Resources International, “Bringing Real Information on Energy Forward: Economic Considerations Associated with Regulating the American Oil and Natural Gas Industry,” April 24, 2009, 2. Available: http://s3.amazonaws.com/propublica/assets/natural_gas/economic_consequences_report_april2009.pdf

(11) That well was drilled about 43 miles south of Morgan City, Louisiana.

(12) Halliburton, “Brown & Root and Kerr-McGee Celebrate 50th Anniversary of First Producing Offshore Oil Well Out-of-Sight-Of-Land,” November 14, 1997. Available: http://www.halliburton.com/news/archive/1997/bresnws_111497.jsp

(13) Robert Bryce interview with Anadarko CEO James Hackett, Energy Tribune, June 12, 2009. Available:

(14) Transocean, “Transocean Inc. and ChevronTexaco Announce New World Water-Depth Drilling Record in 10,011 Feet of Water,” November 17, 2003. Available: http://www.deepwater.com/fw/main/Transocean_Inc_and_ChevronTexaco_Announce_New_World_Water_Depth_Drilling_Record_in_10_011_Feet_of_Water-20C4.html

(15) Note that “extended-reach” wells are known for having long lateral (horizontal) sections. Transocean, “Transocean GSF Rig 127 Drills Deepest Extended-Reach Well,” May 21, 2008. Available: http://www.deepwater.com/fw/main/Transocean-GSF-Rig-127-Drills-Deepest-Extended-Reach-Well-283C4.html

(16) Bryce, Cronies, 26.

(17) Pers. comm. with William Fisher, geology professor, University of Texas at Austin, April 8, 2009.

(18) Huber and Mills, The Bottomless Well, 170.