One company sees opportunity from high oil price

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As the economy continues to improve in the U.S. and thus, globally, the price of oil is also going up. Some experts predict oil to go to $100 a barrel in the near future. It is hard to find someone that believes oil prices will go back down substantially for the foreseeable future. This is a problem for many industries and every individual. However, one company is seeing an opportunity in this problem and they are taking advantage of it.

A company out of South Africa, called Sasol has developed a technology that converts natural gas (which is abundant and cheap in North America) into diesel and other liquid fuels. At the current and expected price of crude oil, the cost of producing diesel in this way is less expensive. They have recently done a deal with a Canadian energy company, Talisman Energy Inc. to invest in a Canadian shale gas field (natural gas deposit) to utilize their technology. Although their technology is expensive under normal circumstances, compared to the high price of crude right now, it makes economic sense.

According to the New York Times (click here to read the article), Sasol developed this technology a long time ago during South Africa’s apartheid government when other countries refused to sell them fuel. This technology was developed due to a fuel problem. South Africa is not exactly considered a hotbed of technological innovation so if countries that are regarded as such would focus on this matter, surely a more efficient technology would emerge. This just goes to show that when a big problem arises, even countries that are not at the forefront of innovation can come up with ways to meet the challenge. In this case, Sasol has a great opportunity to do big business throughout North America and it looks like they are not wasting any time.