Fracking The Virus: How Oil And Gas Contribute To The Fight Against COVID-19

  • Jan 13, 2021
  • Investing

The oil and natural gas industry has made massive contributions to the fight against the COVID-19 pandemic over the last year. Those contributions have gone largely unnoticed by consumers and the news media, and that’s a good thing for all of us.

Our society has faced many shortages and deprivations during this COVID-19 pandemic which has lasted for a full year now and shows no real signs of abating. From toilet paper to paper towels, Clorox CLX -2.1% Wipes to Pine-Sol, pork loins to ramen soup, Americans have at times had to find ways to do without items they had come to take for granted in their daily lives.

One thing Americans have not had to do without at any point during this ongoing crisis is something so fundamental that they often don’t even notice it: Energy. Whether it be natural gas to heat and provide electricity to their homes, propane to fire up the grill or gasoline to power their car, people in the U.S. and around the world have seen no disruptions in supply despite the price crash and demand disruptions that have caused America’s domestic oil production to drop by more than 1 million barrels per day over the last 12 months. The shortages of the goods mentioned above were due either to hoarding or COVID outbreaks in manufacturing and/or packaging plants, not to any disruptions in the transportation aspects of their respective supply chains.

We have seen the same dynamic taking place on the medical front. While the U.S. suffered from shortages of supplies of things like medical gloves, masks and ventilators as the pandemic hit home in earnest last spring, that was mainly a planning issue, not due to any lack of capacity to produce or move those goods.

It gets lost in the daily narrative that all of those items, along with other medical supplies like gowns, surgical equipment, syringes and other single-use equipment are made to some extent with petroleum-based products. Thanks to the re-patriation of America’s chemicals and plastics industries over the past decade, involving billions of dollars in new plant and equipment investments, our country possessed the capacity to manufacture massive quantities of all of those products in just weeks to meet the demands created by COVID.

Now, we see a similar untold story at play where the recently-approved vaccines are concerned. Once these vaccines are mass-produced at production facilities, they need to be moved to hospitals, clinics, pharmacies, and doctor’s offices in order to be distributed to the public. Whether they are shipped by planes, trains or automobiles, petroleum products are being used to deliver the vaccines across America.

But that’s not all. The Pfizer PFE +1.7% vaccine must be stored at minus 76 degrees Fahrenheit, while the Moderna vaccine requires storage at only a slightly higher temperature. The industrial refrigeration equipment that makes such temperatures possible only exists thanks to petroleum-based products. The single-use syringes that keep the process sterile are made mainly from plastics derived from petroleum.

On the rare occasion the role of petroleum products is discussed, the attention tends to focus on the supply aspect of the business. That’s the part of the business that drills and fracks thousands of shale and conventional wells each year to produce crude oil and natural gas in quantities massive enough to keep such products affordable and plentiful.

But it’s also key to note that those are the raw materials: Gasoline and propane can’t exist without the nation’s refining sector and plastics wouldn’t exist without the chemicals and plastics industries. We should also note that those downstream industries receive the vast preponderance of their raw materials via the nation’s network of oil and gas pipelines, which has come under so much attack from activists and politicians in recent years. It’s key to remember that without those pipelines, none of the rest of this is possible.

But of course, the reality about the oil and gas business is that the less it is discussed in the media, the better it is working for all of us. In the context of this COVID-19 pandemic, American consumers should be very happy they’ve hardly had to think about oil, natural gas, and their related plants, factories and supply chains at all. Because if you were talking about it in that context, that would mean you’ve been doing without it, and that is one deprivation that Americans have not had to bear.

Source: Forbes