Skip to main content

Men Plan, Gods Laugh

The morning after the State of the Union address I overheard this discussion.   An individual referenced a proclamation made by President Biden regarding fossil fuel usage to be net zero emissions by 2050, effectively phasing out oil.  The comment, framed as a question, was; “If you were an executive of an oil company having to make decisions about capital investments today knowing that the future might make your product obsolete what would do?”

My first thought was you’d have to assess the potential to be reality.  There is one risk in investing and running a business that you can’t minimize; government risk.  The ability of a government to, in the blink of an eye, change the landscape is forever looming.  If you think the rhetoric is just hot air then I’d say move forward as normal.  Why allow idle boast to drive decisions?  If though, you fear the risk as legit, then you have got to take a completely different tact.

What really is the potential for the risk to be legit?  Tough to say but it has happened and will likely happen again.  The most recent sudden landscape change was at the beginning of COVID and the call went out across the land to shut down every business.  WHAM!!!!  Business plans were shot to hell as production and revenue came to a screeching halt.  The businesses that were able to survive had quickly adjusted what or how they did business.  This change was short term, not long term in nature like ending oil usage.

Long term changes in the landscape have occurred and will likely occur again.  There are several examples; the abolishment of slavery and prohibition. Both dramatically changed how businesses operated.  Looking specifically at prohibition, prior there were thousands of breweries, distilleries and wineries.  More closely looking at brewers of beer roughly 10% survived.  Our current robust explosion of “microbrew” is only now matching the number of breweries of the last 1800’s.  One brewer that did manage to survive was Anheuser-Busch.   They did it by pivoting, making freezer trucks and campers for cars was one of the many things it did.

My answer to this individual’s question is this; taken seriously I would begin diversifying away from oil, while holding onto what you have originally done for as long as you could, hopefully to the end.  Why? First part is obvious, you got to be able to survive after the last well pumped its last drop.  You have to start making freezer trucks.  Second part is basic economics.  During the time that oil and gas producers are being phased out you want to be one of the last standing because you will be able to continue to hold prices high as fewer suppliers are in the market.  Slowly decommission as warranted, minimal investment to keep going.  If you are the last and only one at the end, as demand is slowing you can wait until the inflection point to bail out or ride it to the end.  Best scenario is you sell your last gallon just when one more gallon was needed.  Then turn off the spigot and with your inflated profits ride off into the sunset fully capitalized for your next incarnation.

Comments

Post a Comment

Popular posts from this blog

One Girl Walking 2185 Miles in 111 Days, ALONE

hiker alone accept the sounds of the dark woods. Boon, Cartoons, cartoonist for hire, boondawgoggle, doodles, One Guy Drawing It is without a doubt my long held aspiration to thru hike the AT (Appalachian Trail).  I wanted to share this one Thru Hiker's Blog. This young lady, trail name Wired, just finished her 2185 mile hike yesterday after 111 days on the trail.  She updated a blog daily with wit, candor, and pictures sharing her day to day trials, tribulations (like her monthly periods) and triumphs along with the characters and players that make an AT thru hike an unique experience.     Yesterday's completion of the AT makes her a triple crown long hiker having previously completed the CDT (Continental Divide Trail) and PCT (Pacific Coast Trail).  I encourage you to start at Day One and make reading her blog the daily start to your day for the next 111 days. Walking With Wired: Day 111: Katahdin Baby! : The Birches Campsite(2180.1)-Mt Katahdin(2185.3) Maine...
Post a Comment
Read more

Departure

My mother reached down, straightened my tie and told me to go on outside and wait by the car. My sister soon joined me, dressed in a typical 1970’s plaid dress, knee socks and black buckle shoes. The sun had just started to rise on this late summer day in the suburbs of Washington, DC.  Me being all of six years old and my four year old sister, dressed to the nines standing in the driveway next to the family’s light blue Volkswagen Beetle must have been a sight of curiosity for the neighbor out walking his dog before leaving for work.  He must have known, although we were in our Sunday best, church was not our destination. Soon our mother appeared dressed in the latest seasonal fashion and in keeping with mine and my sister’s attire.  She pushed the storm door open and stepped to the side of the small concrete stoop to hold the door open for our father to emerge.  He was in a brownish suit with a perfectly coordinated tie that was classic seventies, ironing boa...
Post a Comment
Read more

Exercising Obsessed Mom Can't Handle The Truth

One of my Facebook "friends" started posting her daily workout status.  She established earlier on that she was going to challenge herself to do some workout every day for 30 days in a row.  The entire month of November.  I followed these post and noticed there were some who would comment the expected comments, "way to go", "keep it up", "whew, you are making me tired"...all well deserved, but no one was giving her the kind of comments that might inspire her to push harder, like: "is that all you got?", "hmm, only 10 miles", "come on get back in the gym and off FB!" There did come a day when she posted she was not able to workout due to some conflict.   And still no real comments to motivate her.  This post got me to thinking, what was the intent behind her post?  Was it to keep herself on track.  Was it to publicly "brag" or "show off" (felt that was unlikely).  Was it hoped to receive some accou...
Post a Comment
Read more