Sharpe: Mankind – our future ain’t what it used to be

George Sharpe
George Sharpe, Merrion Oil and Gas investment manager

 I’ve got 7.7 billion reasons why I think man impacts the environment. How about this visual… move every man, woman, and child in the U.S. east of the Mississippi River. That would be really crowded. Then multiply by four. That would be the population density in India.

At the end of the day, there are way too many people leaving footprints all over our little planet. Even if all our energy came from renewables, the planet is still going to change under our 15.4 billion feet!

Nature is always changing, yet always seeking a state of equilibrium  If the rabbit population gets out of hand, ultimately the problem will self-correct, as the rabbits either start running out of food or a disease decimates the colony or the coyote population shows up at the new “restaurant.”  

Mankind has changed those rules. In the early 1700’s, mankind was in equilibrium with the planet.  At the time, there were approximately 600 million humans with an average life expectancy of just 29 years. But that didn’t last. 

Ultimately, the British are to blame. In 1712, the world changed forever when Sir Thomas Newcomen invented the first steam engine, burning coal to drive a machine that does work for us.  It took a while, but ultimately that technology spread across the globe, resulting in the Industrial Revolution beginning in the 1800’s and ending who knows if or when or where.  

The true environmental impact of harnessing energy has not just been the emissions therefrom… it has been the fact that energy allowed mankind to thrive and proliferate like no earthly creature before. Agriculture became more efficient, and suddenly one farm could feed thousands. Harnessing energy allowed us to create water treatment plants and sewer systems and to heat homes in the winter, creating healthier communities. Medicines created by and with petroleum have helped fight off the only natural enemy of mankind… a good old fashion epidemic of some sort. 

World Population and Life Expectancy

As a result, the world’s population has exploded… currently at an estimated 7.7 billion and growing at 140 net bodies a minute.  During the same period and certainly adding to the growth is the fact that we are living longer and longer. The current life expectancy is over 70 years for the planet and over 80 years in the U.S. Arguably, the worst thing that could happen to the planet would be for medical science to extend the lives of 7.7 billion people another 10 years, all the while consuming more resources and burning energy of one form or another, to say nothing of bankrupting our medical system. 

You see the problem, right? There is no politically correct course of action. Nobody really wants to go back to the 1700’s to live life without heat or electricity or running water. Nobody wants to let a famine or an epidemic run its course… we must intervene “for the sake of humanity.” And nobody is volunteering to go ahead and die at the age of 29 to help reduce the overpopulation. The brutal truth is that in regard to affecting our environment and our climate, the horse has left the proverbial barn.  

A light at the end of the murky tunnel

As Yogi Berra opined, predictions are difficult, especially about the future.  While our future is yet out of focus, it is not all doom and gloom.  Mankind has proven to be quite the scrappy mammal, able to learn and adapt and improve over time.  

For example, America has made dramatic improvements since the heart of the Industrial Revolution to clean up our air and our waterways.  Pittsburgh, at the center of the Marcellus Shale play, is a shining example of a city that looks far different than during the mid 1900’s.  

America is using energy more efficiently. From hybrid cars to better insulation to LED lights, we are getting the same work (or benefit) from less energy.

Renewable energies, although they still leave a footprint, are starting to proliferate.  Some smart scientist is going to solve the battery problem one of these years, which will allow renewables to play a more dominant role in our energy supply.

In the meantime, our use of carbon energy is also improving. Oil and gas operators have made and are continuing to make great strides to reduce their footprint. Industry is expanding the recycling of frack water, which dramatically reduces the water used per barrel of oil produced. The horizontal drilling revolution has allowed us to co-locate multiple wells on the same site.  

 Further, with multi-stage fracking, each well is replacing as many as 60 vertical wells required to develop the same reserves. The result has been an order of magnitude reduction in the land used per barrel produced.  In addition, the industry has dramatically reduced its emissions even while domestic production has skyrocketed. And despite the U.S. withdrawal from the Paris Climate Accord, America is leading the world in reducing overall emissions.

The bottom line is that mankind is adapting to what will continue to be an ever changing world.  As a result, we don’t have to go back to the 1700’s. Yes, we should continue to try to minimize man’s impact on the planet, but we should do so acknowledging the reality that zero impact is not an option. We can continue to enjoy the many benefits of energy use, we can continue to try to bring electricity and running water to all of the third world, research scientists can continue looking for the cure for cancer, and we can continue to respond to humanitarian crises with compassion and care.  

In the words of Ronnie Milsap, our future ain’t what it used to be. But we are going to be alright.   

George Sharpe is an investment manager for Merrion Oil & Gas of Farmington.