Energy Fuels Are Marketed Products Where Sales Mean BIG Dollars – Competition is Fierce But Often Behind the Scenes

Though it is most often framed as an academic question where smart people use formulas, spreadsheets and debating techniques to prove that their favorite fuel is better than others, the reality is that energy is a terribly useful product that has real value. The number of potential customers is equal to the human population and the volume of business makes selling fuel one of the world’s largest exchanges of money for something of value.

Whether you participate in the business or simply watch the debates as an interested observer and occasional customer, you need to understand that there is very real money and power at stake. Some of what you read comes from people who are very open about their interest in selling a product; much of what you read comes from people who are using less above board techniques to gain an edge and score points. Some of those behind-the-scenes efforts are perfectly legal, others are on the edge of fair play and others are shady or flat out illegal efforts to manipulate the market for enormous gain.

In my formative years, I devoted much of my time to two competitive sports – swimming and water polo. The swimming came first; I was not able to add water polo to my portfolio until I was at the Naval Academy. I keep going back to the differences between those two sports and the lenses that they have provided me. Those lenses let me see the world differently than people with other competitive experiences. I am not sure if what I am going to write hear counts as wisdom, but perhaps it will provide you with a slightly different way to look at a fascinating – and very important – competitive landscape.

Humans are often motivated to test themselves against other humans in contests of speed, strength and/or endurance. We have created many sports and events that allow us to fulfill that motivation. I clearly remember the moment that I decided to join a swim team. I was almost six years old and we were on vacation at a campground with a beautiful lake. There was a platform out in the lake that was great fun for playing, jumping and even a bit of friendly pushing and shoving. My mom’s sister and her family had met us at the campground and we were all having a ball out in the water.

My cousin challenged me to a race out to the platform. I am 11 months older than he is, a difference that is almost non existent now, but seemed huge when I was 6. He won the race by a stroke or two and I was MAD. I considered myself a pretty decent swimmer; I had learned to do the freestyle when I was just 2. My mom earned a bit of “play money” by teaching lessons in backyard pools near our home in South Florida and she asked me to help her demonstrate to her students.

After losing that race, I found out that Todd had been swimming on a team for most of that summer; he was in better shape and had learned to refine his stroke. Mom and Dad thought competitive swimming was a great idea and signed me and my older brother up for Hollywood Swim Team soon after our vacation ended.

I spent 11 years in the pool nearly 365 days a year. I put in a lot of hours, sometimes with a summer schedule that had us starting with a session from 5:30-7:30, a lunch session from 12:00-1:00 AND and evening session from 4:00-6:00 with a total distance of 18,000 meters per day. It was sometimes monotonous, often quite social (there were more girls on the team than boys), and occasionally very rewarding – from a self confidence point of view. I will always remember the meet where 21 of us went to Wisconsin for a winter (indoor) event. I was proud to come home with three medals, but a bit shy about talking too much about them – the entire team won four or five medals at that event.

One of the things that I learned about competition by being a reasonably good swimmer was that it was a lot of fun, especially when you beat your own time in an event and can track your own progress. It was fun to win a race, but I realized very quickly that there were always people who were faster; they just might not have been in the water at the same time. I also enjoyed the fact that organized swimming took place in carefully measured pools with engineered lane lines designed to reduce turbulence and prevent interference between competitors. The results of the events were measured with engineered touch pads that could make a judgement down to 0.01 seconds. There was never any debate about who won or lost and few debates about who was “the best” swimmer. The clock ruled and halted most arguments.

One of the most bitterly disappointing races of my career was when 0.4 seconds separated my time from the winning time, but I was in fourth place by 0.03 seconds. The first three places all got medals and an invitation to the state championship swim meet. I got a pat on the back and advice to work harder for the next district meet – which was a year away.

My eyes got opened in a big way when I started playing water polo. At the time, I had never had an opportunity to watch the action under the water; all I had ever seen was a few minutes of the above-water play. I was a strong swimmer and thought it would be fun to play with a ball and score points. As a late starter in the game, I was not very competitive at first and never did get very good at pulling my competitors under water by their suit, kicking them in strategic locations as they were about to shoot, or keeping a opposing player engaged while one of my teammates took a shot. I did okay in open water, but the underwater, underhanded activity that risked a time out penalty was never my forte.

Coming back around to energy fuels – I have been actively involved in rather academic discussions on the topic on the web since getting my first account back in the early 1990s when the USENET and bulletin board discussion groups were the only options for social networks. I had some background experience in operating nuclear power plants; I had just completed a decade of training and had served as the engineer officer on a nuclear powered submarine from 1987-1990. It was obvious to me that any fuel that enabled underwater power for more than a decade from a mass not much larger than my own body mass was superior to all other choices. I thought I was pretty well armed for the debates, but soon realized that I needed to do more homework and preparation to compete and withstand some of the less civil tactics used by the opposition.

I did as I have always done- I started reading voraciously on the subject. The more I read, the more interested I became. One of my favorite books of all time is Daniel Yergin’s The Prize: The Epic Quest for Oil, Money, & Power published in 1991. That book is nearly 800 pages long and was the basis for a major PBS television series. It is a fascinating sweep of history starting around 1850 with people like Benjamin Silliman, George Bissel and “Colonel” Edwin Drake who recognized that certain kinds of rock could be squeezed or prodded to release a substance that could burn as cleanly as whale oil. As the book progresses through the remainder of the 19th century and up to an epilogue that discusses Saddam Hussein’s occupation of Kuwait, it reveals information about nearly every major political figure and shows a revealing view of world events that I had learned about in history classes and in other books.

While teaching me to see history through the lens of an “epic quest for oil, money and power”, however, The Prize reminded me of the lessons I had learned while playing water polo. A whole lot of activity happens outside of the normal field of view, especially when highly motivated participants think they can get away with playing dirty or working hard to keep their opponent from succeeding. The stakes in the game are nothing less than world influence, incredible sums of money, and even the power to take vast numbers of human lives. As The Prize taught me, Texas oil men had as much to do with Allied success in World War II as did any of the admirals, generals, presidents or prime ministers.

I learned just how serious some of the players were about winning and maintaining the money flow which enabled their personal power. Their back room negotiations and dirty tricks were not always something they would do in the full light of day. They formed alliances and cartels that allowed unfair influence and were even illegal in some countries. As in the “jungle ball” version of water polo, the players in the energy game often ganged up on the guy with the ball, waved their hands to cause distractions and reached under the water to pull and tug.

As in water polo, sometimes none of those activities can stop a really excellent player. Sometimes a player with raw talent can be hampered when he is new to the game, but with perseverance the player can learn to use his raw talent to score. If that talent comes with physical attributes like long arms, big hands and powerful legs, that player can dominate a game and no amount of underwater activity can hamper his performance, especially if the referees on the pool edge are unafraid to blow their whistles. About the only thing that established players can do to prevent that talented, physically dominant player from upstaging their power in the game is to work together with their normal opponents to keep him out of the pool.

The energy game started long before oil entered the marketplace, and it took oil many years to gain a foothold in a world dominated by coal and wood. For the early years of the oil game, Pennsylvania had the raw resources that granted dominant power. As those resources in Pennsylvania were depleted, the extractors shifted their efforts to Texas and California and then to Saudi Arabia, Alaska, Russia, Venezuela, Mexico, Nigeria, Iran, and Iraq. There other players on the field like coal and natural gas that continued to play a role, but they were not as versatile or valuable as oil. The continuing competition for sales of energy fuels could accept those players with some amount of respect and allow them to participate in as bit players in The Game for wealth and power.

For the very late stages of The Prize there was some mention of nuclear power, but in 1991, when the book was published, it was almost a footnote or a mere distraction with little importance. Though it had some evident physical advantages, it entered the The Game without any experience and did a clumsy job of trying to score points.

In my view, the purveyors of atomic fission have had some opportunity to develop and refine their technology to the point where it is threatening the established players in the pool. I have a mental picture of a bunch of reasonably fit old men in the water with some unusual looking competitors waiting for an invitation to play. Those potential new players have physical attributes that are visible but hard to comprehend. The atomic players in waiting have managed some amount of land based practice, but the guys in the pool are just not ready to let them into the game without some restrictions that tie up most of their arms and prevent them from walking on the bottom of the pool with their heads well above water.

Over on the other side of the pool is a large group of rather anemic looking substitute players who occasionally get invited into the game and sometimes put a lucky shot into the goal, but those alternative players never manage to keep their heads above water without some approved floatation devices. The old men in the pool invite the substitutes to play if they get winded, but they realize that the aging and anemic substitutes have no real developmental chance of taking over.

The everyday players on all sides of the competition, however, seem to have an unwritten agreement to keep the atomic interlopers out of the game as long as possible. It is pretty hard to imagine that any of the current players can win when there are giants who can stand on the pool bottom with their heads high above the water who have many arms that each can turn a ball into a speeding bullet that penetrates the goal with amazing accuracy.

Sorry for all of the tortured metaphors. What I am really trying to say is that academic discussions about “the next big thing” in energy supplies ignores the fact that there are already people in the game who often have the opportunity to make enormous sums of money to add to their already bulging bank accounts. They will do everything in their power to keep scoring points including talking down their competition, distracting the referees and the fans, and working together with the opposition in the game to erect barriers that keep potentially dominant atomic giants out of the game as long as possible.

When you read or hear someone talking about how alternative energy sources that have been around for thousands of years are going to magically get better, or if you hear about how a current participant in the game is suddenly going to start scoring all of the points, never forget that the source of that information is probably a fan. He might not admit that he is betting one way or the other or he might have hedged his bets, but there is little doubt that he cares about the outcome. He just might care so much that he is willing to cheat or be sneaky to gain an advantage.