BIC Alliance President & COO Thomas Brinkso
As an energy professional in the information business, I'm commonly asked for my opinion on the long-term outlook for oil and gas and petrochemicals. Everything related to the industry seems to be collapsing. Companies in the business of exploring for or producing hydrocarbons have seen their share prices decline 50-95 percent in the past few months. Some have filed for bankruptcy, and others will surely follow.
The root cause is an imbalance of supply and demand that has thrown a tough gut-punch to many of our companies. The global travel industry, which uses a sizable portion of the world's oil output, is on its knees. The world seems to be swimming in energy, as we all know by now. Inventory builds and demand is being demolished due to the coronavirus. On top of this, there is also the constant societal push toward so-called green energy that many would envision replacing oil and gas in the not-so-distant future. Are we still going to need oil and gas? And if so, to what degree?
Whether there's a second wave or not, the coronavirus will not last forever. I encourage us all to look with optimism at the global trends that were the cause of widespread optimism for our industry just six months ago. I'm convinced there is a tomorrow ahead for us in the oil and gas and petrochemical business.
Let's first consider other commodities whose previously widely predicted demise was flat-out wrong.
When asphalt was first being widely manufactured, it was predicted that the concrete business would be permanently decimated as roads made of concrete were no longer absorbing demand. Today, we use more concrete than ever, but roads are made from asphalt. When plastics were first being manufactured broadly, it was predicted that the glass business would be permanently decimated as beverage bottles were no longer absorbing demand. Today, we use more glass than ever. Similarly, when email and digital records first became widespread, the paper industry was predicted to atrophy into oblivion. Today, we use more paper than ever, ironically, thanks to online shopping that sends a never-ending parade of brown cardboard boxes to our front doors.
Why did these industries continue to thrive instead of fading away? Global demand has increased as the global population increased. The same shall also come to pass for the oil and gas and petrochemicals industries.
This year, the population of the world will increase by about 80 million people. In each succeeding year, these incremental increases will continue. While the coronavirus has turned out to be a train wreck for the global economy, I haven't heard any predictions that it will affect the upward trajectory of the rise in population as we adapt to it.
Growth in population and consumption will certainly slow down for a while, but if we zoom out and look at the timeline on a macro-scale, the current malaise will be a blip in the timeline. Further, in the macro-view, the middle class of the world will continue to grow, mostly in the Middle East and Asia. And when the populations of second-world countries advance into the middle class, they'll want roads, cars, cellphones, refrigerators with meat and produce wrapped in plastic, and the like. The middle class loves to use stuff. Most projections show this sector of global population increasing by around 40 percent in the next decade.
The simple reality is that, in order to meet the basic energy demands of a world 30 years from now, where the population has jumped from the current 7.8 billion to 10 billion, we are going to need more energy, not less.
We in the oil and gas and petrochemical industries can take heart. With the projected population growth and even factoring in significant growth of wind and solar power, it is expected that the world will need 30-percent more Btu equivalents from traditional oil and gas in three decades than we do now.
When I take a step back and look through a macro-lens, there is plenty for which to be grateful. We should see that it is good and proper to seize the day and aim high. Know that anxiety is natural and unavoidable, but the prison of anxiety is optional. Opt-out of it and count blessings instead.
For us at BIC, our web traffic is at an all-time high, with 58,000 visitors to our site last month, and our print demographic is likewise stronger than ever. While our readership is up, our aim is still higher. Our recruiting division is still very active, and COVID-19 has not erased recent gains, as many other companies are also aiming high and seizing the day to upgrade and add both operational and sales talent -- not to merely endure the crisis but to emerge from it with a stronger team. We should aim high, and so should you.
But it is not what we aim for that is of primary importance for our companies; it is the question of who is chosen and empowered to get there. Again, I encourage you to think "macro." The issues of how we are going to achieve goals and what we have to do are what most managers focus on. It usually isn't difficult to know what needs to get done. We have to get from "point A" in this crisis today to "point B" after the crisis. How we get there is the hard part.
In considering how we move forward, many will have to consider the most difficult task in management: Do we have to consider a reduction in staff, and if so, how many and who will we need to release? This is a time in the life of your business for moving the focus from "what we must do and how we will get this done" to the more important variable: "who will best help get this done." If we move the focus to the "who," the "how" will most certainly be accomplished more efficiently.
Fortunately, at BIC, we have the best staff we have ever had. The teamwork and camaraderie we possess go a tremendous way toward making the work smoother and more enjoyable, even in the present environment. Our team will continue to bring you the news of our industry and help connect business and industry for the betterment of all.
If you are interested in planning the "who" and "how" to help in your success next year and beyond, please contact our offices and we will be happy to help assist you.
Meanwhile, in this issue of BIC Magazine, we feature interviews with Mark Vergnano, president and CEO, Chemours; Ray Rigdon, general manager -- Alliance Refinery, Phillips 66; Michael Key, owner and CEO of Key Pump & Gear LLC; Davian Ploger, CEO of Horizon Environmental; and Bill Brown, co-chair of IMPACT. We also present a wide array of articles on topics important to your business, such as the key to unlocking successful turnarounds, calculating fall clearance for fall protection, the importance of process safety reviews and how to connect workers to your company strategy.
I hope the content in this issue is a blessing to you, and I encourage you to strategize for the future by building a team that enhances your efficiency and promises your long-term success.
