OrionWorks wrote:
Well Jed,
Your recent rant against Exxon seems well placed.
See:
http://www.resourceinvestor.com/pebble.asp?relid=32431
This news item says that Exxon has decided not to diversify into wind
energy , solar energy and so on, and they are bucking the trend set
by BP and other oil companies.
Actually, I sympathize with them. Asking them to "diversify" into
wind energy would be like asking the Pennsylvania Railroad to
manufacture automobiles back in 1920.
The Pennsylvania Railroad was the world's largest and most powerful
corporation back at the turn of the 20th century, but it was defunct
by 1968. Business analysts nowadays look at this history say, "they
should have realized they were in the transportation business, not
merely the 'railroad' business." Since cars were taking over
passenger transportation should they have tried to get into the car
business? I do not think so. They had no an expertise in
manufacturing. In that situation, the only logical thing to do was to
liquidate the railroad and invest the money in GM instead. That is
more or less what Wall Street investors did.
In the 1940s as airlines became popular, the railroads might have
tried to diversify into air transport, which was at least a little
more like their business, with selling tickets and sending groups of
travelers to different locations. But they never tried. They never
even offered bus service, which is the closest thing to railroading.
In the end, their expertise was in wooden ties, steel rails, heavy
equipment, assembling trains, dispatching and so on. These are
high-tech, high-profit skills, but they were not applicable to other
modes of transportation.
What Exxon does is: find oil deposits, drill holes in the ground,
ship oil on 200,000 ton tankers, refine oil, and so on. These are
even more specialized, high-tech skills. The oil companies have
unrivaled knowledge of geology and they can handle gigantic masses of
toxic chemicals. But those skills are no help in manufacturing solar
cells, and they have even less to do with cold fusion.
Some of the oil services companies that fabricate, erect and maintain
drilling platforms have skills which are applicable to wind turbines,
but I doubt that the oil companies themselves have a competitive
advantage in that business.
I touched on this subject in the book, in chapter 7: "The established
fossil fuel energy companies will have difficulty entering the market
for cold fusion products for a simple and strictly practical reason:
they have no relevant qualifications. Cold fusion energy will be
built into the machinery itself. The fuel will be incorporated in the
device just as it is in a dry cell battery. Companies that have
experience building heat engines, furnaces and batteries will have
the kinds of skills needed to make cold fusion cells. Fossil fuel
companies that drill oil wells or mine coal will not."
- Jed
