I have been thinking about a news item that came out last month and received little notice within the business news.
On March 24th the Rockefeller Brothers fund sold off the last of its holdings in ExxonMobil — the current iteration of the original Rockefeller company of Standard Oil — which accounts for the family’s billions.
The Rockefeller Brothers fund is the last of the many family funds to sell off its energy holdings over the last two years. Other larger funds sold off their holdings in 2014 at the time when oil was trading in the $90 barrel range.
All the funds cite climate change as being too strong a headwind to hold crude oil-based investments.
So this is my thoughts on this.
We went through the theory of peak oil starting about a decade ago, suggesting that the easiest available crude oil was now less than what we had already taken out of the ground. The peak oil conspiracy propped up crude prices for 13 years from 2001 through 2014.
As the Internet bubble imploded and global economic expansion ground to a halt, peak oil — working on the theory of supply and demand — kept the price of oil from cratering.
Peak oil also brought about fracking technology, which allows companies to go back to older wells and extract additional crude and natural gas using pressurized water to draw out more product.
Fast forward to 2015, reports say the reason oil is cratering in the second half of the year is because of weaker trade and abundance of crude due to fracking.
I’m looking at this a little differently. What if the Telsa car is a stepping stone to alternative energy?
If the Rockefeller’s are out of oil, then is the next technological leap about to be unveiled? Is there a new technology about to be unveiled to spark the next leap forward?
I’m not speaking of electric, solar or biomass energy. Like the Internet drove the economy for 20 years, is there a version of zero-point energy on the verge of a rollout?
Looking at it from an economic perspective, could the current growth malaise be snapped with a technological leap forward as a way of freeing up capital from energy costs and creating a new industry to build machines to access the technology?
Naturally, there is no answer to this now, but laying out the events of the last two years, it appears some of the groundwork may be put in place.