The History of the Western World Is the Story of Energy Revolutions
Over the past two centuries, every great leap forward has been driven by a corresponding technological advance related to energy.
Coal — along with the steam engine and the transcontinental railroad — catapulted the economy into the new industrial age.
Electricity lit up the nation’s cities, transformed communications and set off a chain reaction of inventions, innovations and changes that continue to this day.
Gasoline and the internal combustion engine drove the next great fuel revolutions, as Henry Ford began to mass produce the Model T.
Each of these energy revolutions was sparked by a new technology.
Each was powered by a new source of fuel.
And each made early investors wealthy beyond their wildest dreams …
- J.P. Morgan and The Railroad Revolution
J.P. Morgan amassed a fortune of about $1.3 billion, approximately equivalent to $28 billion today.
- The Electric Revolution and the Making of a Giant
Adjusting for the subsequent growth in the U.S. economy, Vanderbilt’s fortune at the time of his death would be equal to approximately $143 billion today.
Rockefeller founded the Standard Oil Company and pioneered vertical integration for the industry, controlling development, refining, distribution and marketing. Plus, at the same time, he also integrated the industry horizontally — investing in other, related fuels.
Within a decade, his companies had achieved a virtual monopoly over the industry, emerging as the largest corporate empire in the entire world. How much would his fortune be worth in today’s dollars? Approximately $700 billion, far more than any other individual ever.
We have every reason to believe that crude oil simply cannot continue to be the primary fuel source of energy in this century.
Fortunately, however, there is an alternative, and I’m not talking about a utopian vision of solar or wind power.
Source: Money and Markets
The Great Energy Reversal
Change No. 1: It moves the U.S. market from a price-taker to a price-setter.
Change No. 2: Having sufficient domestic volume makes us less susceptible to pricing spikes.
Change No. 3: (and most important): Crude is no longer “the fuel of choice.”
Now, this is not going to happen overnight. The domestic replacement of reliance upon some of the crude oil and oil products import volume will not be inexpensive or quick.
The international stage will still pressure both prices and availability.
But, as we roll out this new energy balance, what happens here in America will have a greater determining factor in our market pricing and value.
Source: Energy Advantage
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