Curing the Peak Oil Disease

For example, let us assume that today a scientist has found the cure for aids or cancer or Parkinson’s, but the production of that cure is dependant on ten ingredients that come from medical patents owed by ten different pharmaceutical companies.  Will that scientist ever be able to convince each of those ten, competitive pharmaceutical companies to allow him to use their patents, even with a small cut of the profits?  Not likely.  The result is that this cure will be shelved and that many years of additional research and resources will have to be expended in order to find another cure that doesn’t use those ten patents.  Such an example is not unimaginable and in fact, occurs quite regularly.  For example, electric car battery technology could be much farther along than it is today if not for the oil companies’ (who bought many innovative car battery patents for their own reasons) unwillingness to license out their patents.

In response to this current state of affairs, governments should consider making all patents or at least a certain portion of them ‘open source.’  What this would entail is that any individual or company can use any patent they wish without need for permission or fear of being sued for patent infringement.  Of course the danger of this would be that larger corporations may take advantage of this reform by taking patents from their smaller competitors and then selling the same products as their competitors but at a lower cost, thereby driving these smaller businesses out of business and creating a monopoly.  To combat this possibility, only two simple limitations need be placed on this reform: (1) patents of others can only be used to develop new products that do not compete (directly or indirectly) with the products produced by the patent of the original owner; (2) if a patent is used, then a royalty must be paid to the owner of the patent, the size of which will be relative to the unit sale price of the new product and the centrality of the patent within the new product’s design (further research would need to be done to find the exact ratios of these royalty payment requirements).

Implementing this simple reform would unchain the hands of innovation that were previously confined by overprotective patent holders.  Moreover, such legislation is not new; in fact, during WWI, the US created a patent pool within the airline industry that allowed airplane makers to swap technology and share profits without the threat of being sued.  This led to rapid advances in airplane engine and design technology that helped the Allies eventually win the war against the Germans.  The same can be done today, at the very least within the fields of green energy, that may just spur the rapid development of new technologies that can help the world enter the new carbon age.

As for what individuals can do about the coming reality of peak oil, they can start by educating themselves, their family, loved ones and neighbours about the reality they will all in time share.  They can make active choices to reduce their carbon footprint by choosing to live in the city instead of the suburban sprawl, choosing public transit instead of owning a car, renovating their homes to be more energy efficient and purchasing energy efficient and locally produced goods and foods.  They can learn to recycle, compost their own organic waste (if possible) and if they live in a house, learn how to turn their backyards into miniature farms that produce edible food (saving on food bills in the process).  And if people are willing, they can even take some basic survival training courses and most extreme of all, actually build relationships with ones neighbours and community so that they can rely on them when times get rough.

In conclusion, there are no quick fixes to the problem of peak oil.  Any solution will take time and the economic turmoil that will occur in the interim will be shared by all.  As stated earlier, by taking steps now to address this issue, through legislative and technological innovativeness, the world may just have a chance at avoiding the worst that peak oil may unleash.

By David Alexander, Founder & CEO

In association with:

The ARB Team
Arbitrage Magazine
Business News with BITE

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