The demise of the dinosaurs – some parallels

65 million years ago, dinosaurs ruled the planet. They had conquered every niche of life and ruled the elements. Huge marine Dinos dominated the seas, the biggest land animals ever roamed the planet and the skies were full of airborne Dinos with wingspans that rival today’s biggest sailplanes.

However, were they alone? Of course, they were not. They have never been. In fact – there was life as different from the Dinos as we are from them before, during and after their reign. They were a chapter in earth’s history.

In the end, they were snuffed out by a meteor strike that had hit earth about 66 million years ago. This, at least, is how the theory goes.

However, would the Dinos have survived even without the meteor or was the meteor just a quick ender of what would otherwise have been a slow, awful demise?

I am different, don’t you see …

One thing is for sure – there were other and much bigger cataclysms in earth’s history and chances are, there will be more. Moreover, it is very likely that the Dinosaurs had survived some of them. However, suddenly, one hit and they are gone.

Let us come back into times closer to ours. Big multinational energy companies could be today’s dinosaurs. Quite often, they are the leftovers from utility businesses turned commercial – some of them many years ago.

In the past, going for energy was such a colossal undertaking and so technically complex that only big beasts could muster the money and the gall to go for it so it seemed to make sense to bundle forces in those monsters. However, they had something else – protection from market forces. Utilities thrived in a no market environment – usually feasting on some kind of monopoly.

They have taken their size and chunkiness into today’s far more flexible times and hence stomp energy planet with heavy feet.

However, over the last 10 years, a different flock of energy players has emerged. Small, lean and flexible as the world is today, those new players have none of the baggage and the economic might of the old utilities. They are thriving on the principle that a business is only a business after all. They try to do whatever is commercially reasonable.

Much like the mammals zip zapping between dinosaur’s legs for many million years before their eventual demise, those new players thrive in niches which are small and hence unattractive to the big boys.

Moreover, it is also often because they do not have access to the cushy, “pay no matter how shoddy your service is I have to pay you” big base-load utility style business, they must invent new ways of working opportunities in the energy world. They must be better, faster and cheaper than anyone else must.

This is in itself a slow, yet inexorable revolution that will eventually do away with the big boys as they are no match for the lean, mean and aggressive new competitors. Energy goes real clean, real small scale and real renewable in a big way for the first time and this in itself is already a huge game changer as small players are usually better equipped to spot those trends where they occur, home in and start working them for what they are worth. They are also better equipped to deal with the complexity that this new world brings with it.

Dinosaurs were eating machines but they were by no means brainless. There was a lot of evolution from the real gigantesque eating machines like the Sauropods that lived in the earlier years of the dinosaur reign and a T-Rex which is an eating machine as well but significantly more developed. Sauropods laid 1000’s of eggs and left the hatchlings to fend for themselves hoping that one in 1000 would make it to adulthood. They flooded the world with hatchlings but took no care of them.

By comparison, T-Rex’s were loving, caring parents that groomed their offspring much like mammals do. They could do with far fewer eggs.

I’m a dinosaur, don’t mess with me …

In the energy world, we have the same picture. Old completely unreformed companies are more like the Sauropods, flooding the world with brainless projects and there are more refined players comparable to the T-Rex that take great care of far fewer projects. But in the end, they are all Dinos and as such they must fade into oblivion.

Mass production on every instance of the chain beats “big” any time. Having natural gas from Russia or from Norway (just to name two examples) is nice but producing it ourselves is even better and when this production at home becomes cheaper than the Russian thing, things do happen. I am talking about any production, which could be shale as well as eventually some synthetic methane.

New energy networks, which include everything from primary and secondary energy production, storage, transport and consumption, will be small and resilient. It will not be economically attractive to transport methane molecules from faraway places to cook meals in Europe anymore as not only the economic cost must be factored in but also the risk of big style infrastructure failing because of natural events, political gambling or war & terrorism. Russian gas supplies for Europe today exemplify those risks.

Dinosaurs would eventually die out. Or, did they?

Look again; the Dinos from 65 million years ago have not all gone. Some of them have evolved to become something else – our feathery friends. When you enjoy roast turkey next time, bear in mind that you are just slicing up a T-Rex that has evolved. Look at Velociraptors (not the vile beasts in the Spielberg movie, but rather how scientists imagine them for real) and you see much better how the old Dinos have evolved and they are still around.

Some became chicken, scratching soil for subsistence ending on our plates in the end – some soar in the sky as eagles. However, none of them is a match to lions and bears, the dominant mammals of today that are akin to the new style energy players. Energy dinosaurs rule is in its last years, we are just waiting for an asteroid to hit the energy world. Perhaps it already did through the Ukraine crisis and the rise of the Islamic State. Maybe those events have opened our eyes to the fact that the old energy world is not sustainable and that US style energy independence is a worthy goal.

In order to save the world, big energy companies of today must evolve or die. The choice is theirs if it shall be the chicken or the eagle or death – the world is not waiting anymore.