Dean Barber

Archive for January, 2014|Monthly archive page

The Issue for Our Time

In Uncategorized on January 26, 2014 at 6:00 am

It was 1998 when I left the newsroom after a 20-year stint working with daily newspapers. It was a good run. I have no regrets.

Newspaper work was probably the hardest work that I ever did, and I truly loved it. My identity was wrapped into what I did like nothing I have ever done since. I lived and breathed it 24/7. The ink was in my blood,

To this day I’m not quite sure why I walked away from it. I was the business editor of The Birmingham News in Birmingham, Ala. I think I just wanted another challenge, and I got it with the Economic Development Partnership of Alabama.

As director of international development, I had a dream job that sent me all over the world. I think I got up to eight languages on how to ask for a beer and the restroom. (I may be down to three or four now.)

My Sixth Sense

Both journalism and economic development have left their marks on me today as a consultant and to good advantage. I’m jesting here, but economic development taught me how the patient nurturing of a garden could result in the sprouting and growing of very lovely plants that would bring joy to all. Peace in the valley. Let freedom ring.

Whereas journalism taught me death by deadline, a hell-for-leather mission to expose any and all conniving bastards who deserved exposing, bringing the walls down around them by laying out the facts for all the world to see. No prisoners taken. Rawhide!

But seriously, probably what journalism taught me more than anything was how to dig for information, to go beyond the surface and ferret out what is real from what is, how should I say this delicately? … bullhockey. Call it a sixth sense.

Giving Edges

My resulting investigative skills and nature now serve my consulting clients well. Ascertaining information that can be used in a strategic manner can give an organization a big competitive edge.  And that’s what my consulting business is all about – giving edges to those I serve.

And largely because of my newspaper upbringing, I strive to write in plain English rather than in some jargon-inflated consultantese. Some of that proffered gobbledygook may initially look or sound pretty impressive. But when you actually parse the words, you’ll see they’re often just calling a duck a duck.

So the skeptical and somewhat cynical journalist will always be a part of me. I’ll often question the official line, because sometimes it simply needs to be questioned. Digging below the surface, I’ll find that sometimes it’s accurate, sometimes it’s partly accurate, and sometimes it’s just a bunch of bullhockey.

Recognizing the Big Story

And I also continue to look for the “big story,” that mega-trend in business that can be leveraged in order to get that competitive edge. That holds true in both my site selection consulting work for companies and my economic development advisory work for communities.

 I’m no futurist, mind you. If I was one of them, I would be able to charge three or four times what I do now. But I do lean forward and try to figure out what the heck is going on.

So during the past year, in speeches that I made around the country and in this blog, I have been telling about this new digital machine age that I believe that we are in the early stages of, and which is having consequences on how we work and maybe more importantly, who gets work.

I have also been talking and writing about this shale gas revolution, which if I would have predicted five years ago, I would have been termed a nutjob. Truly, the hydraulic fracturing technologies have unleashed a huge natural resource that can and should give the United States a competitive advantage in terms of energy costs vis a vis the rest of the world for decades to come. And that can only bode well for our manufacturing sector.

Now a Mainstream Issue

But the story that I have not written much about, but which may be the biggest story of all, is now becoming quite mainstream. Indeed, I’m convinced it is being talked about around kitchen tables throughout America. And that subject matter is the inequality that exists between the ultra-rich and the rest of, well, us.

Many if not most leading economists believe this wealth gag, now the widest since the 1920s, has a detrimental affect on both big business and small business alike, and thereby creates a drag on our economy and economies worldwide.

This was the overriding topic this past week at the 2014 World Economic Forum in Davos, Switzerland, where heads of state, Nobel laureates, CEOs and media titans gathered.

Although Pope Francis didn’t go to Davos, his message read at the opening ceremony helped put inequality at the forefront for the event’s 2,500-plus attendees. The pontiff urged business leaders and global influencers to put people above profits, and use their wealth to serve humanitarian causes.

“I ask you to ensure that humanity is served by wealth and not ruled by it,” the pontiff said.

A Growing Embarrassment

“The kind of people over there (in Davos), other than the professors, are making a great deal of money more than their predecessors were a generation ago,” University of Maryland economist Peter Morici told CNBC.  “This is a growing embarrassment. The differences in income between Wall Street and the rest of America are astronomical.”

Also last week, on the eve of Davos, we learned that the combined wealth of the world’s richest 85 people is now equivalent to that owned by half of the world’s population – or 3.5 billion of the poorest people. 

In a report titled “Working for the Few,” the global aid and development organization Oxfam reported that the wealth of the richest 1 percent of people in the world now amounts to $110 trillion, or 65 times the total wealth of the bottom half of the world’s population.

Bad for Everyone

Henry Blodget, co-founder, CEO and Editor-In Chief of Business Insider, one of the fastest-growing business and tech news sites in the world, writes that “America is rapidly becoming a country of a few million overlords and 300 million serfs.”

He contends that such polarization is bad for everyone, including the overlords.

“Because when inequality gets bad enough, serfs can’t afford to buy products from overlords. This hurts the overlords’ ability to get even richer. And that’s what’s wrong with the American economy right now. The serfs are tapped out. The overlords are responding by cutting costs (firing serfs), to increase profits. Unfortunately, one person’s “costs” are another person’s “wages,” so this is making the problem worse.”

Blodget says, and I believe he is correct, that increasing taxes on the rich is not the answer, as it only inflames arguments of class warfare and has people yelling of socialism.

“The best way to fix inequality is to persuade our overlords that it is in their best interests to share more of their wealth by paying their employees more for their work — work that, not incidentally, is what makes the overlords rich,” Blodget wrote. “In other words, the best way is to persuade companies that it’s better to focus on creating value rather than just profit.”

I like Blodget’s reasoning, but it will be a tough sell to shareholders who are very much focused on profits.

A Rigged System

A Gallup poll published this past week shows that 67 percent of Americans are displeased with the ways income and wealth are distributed.  Exactly three-fourths of Democrats said they were “very” or “somewhat” dissatisfied, whereas surveyors recorded 54 percent of Republicans agreeing to the same question.

“I really think this is the issue for our time,” co-host Joe Scarborough said on Tuesday’s Morning Joe. “We’ve got a system that is not just rigged by politicians in Washington, D.C.”

The Gallup poll suggests that people are really hurting after 30 years of stagnation for the middle and working class.

“This is not about party,” said Scarborough, a former Republican congressman. “We’ve got a systemic problem, a generational problem, and we’ve got to fix it or this country is not going to look like itself and this world isn’t going to look like itself 15 years from now.”

Joe is right — this is the issue for our time, and we’ve got to fix it.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm based in Plano, Texas. If your company needs an optimal location for future operations anywhere in North America, we can help. If your community needs to improve its competitive standing, we can help. All requests for information are considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, but only if expressed permission has been granted.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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I Can’t Whistle Dixie

In Uncategorized on January 19, 2014 at 5:41 am

From the Oval Office of the White House, President Richard Nixon, under assault from the Watergate scandal, uttered a remark to his aides that is now in the annals of history: “We can do that, but it would be wrong.”

That phrase has resonated with me over the years. On more than one occasion, I have thought, “Yea, we could do that, but …

Most of us have an internal governor that serves us well in distinguishing between right and wrong. Now we may choose for convenience sake or that of greed to ignore our conscience, but it is there nonetheless, a nagging guidepost within.

Mind you, there are those rare psychopaths who truly lack behavior controls and have an absence of empathy. In his book, “The Psychopath Test: A Journey Through the Madness Industry,” British journalist Jon Ronson reported the incidence of psychopathy among CEOs is about 4 percent, which is about four times what it is in the general population. 

If the Whiskey Holds Out

In my rather long career, I believe I have come into close working contact with only one such CEO, whom I believe would aptly fit into the psychopath category. Instead of empathy, I detected a certain joy in manipulating people, a lack of remorse, and a distinct belief that the rules do not apply to them. 

These human versions of great white sharks are relatively rare, but they are out there. For them, an ethics course in business would be beyond the pale. It would do them no good.

But for the rest of us, this notion of business ethics is something that we should both recognize and be reminded of on a regular basis. If you are to do right by yourself and others, it behooves you to think about the rightness or wrongness of what you are doing or what you are considering to do.

I am reminded of a book by the late Larry L. King (not to be mistaken with the former CNN broadcaster), which was entitled, “Of Outlaws, Con Men, Whores, Politicians and Other Artists,” probably long out of print, which focused on the ethical lapses. This Lone Star letterman once quipped, “If the whiskey holds out and you’re not under indictment, you can have fun anywhere.”

If only it were true. But of course, it’s not.

I Walk the Line

As a business consultant, a man with a briefcase who lives at least 40 miles away from you and who has all the answers to all your problems for now and evermore, I don’t mind telling you that I have my own ethical tightropes to walk. This is true in both site selection consulting for corporate clients and economic development consulting for communities, which are my two fortes. I walk the line by the very nature of what I do.

The immediate question that came to mind when I first formed Barber Business Advisors some years ago was if there was an inherent conflict of interest in offering consulting services to companies for purposes of site selection and then also to economic development organizations. And I concluded that there most certainly can be such a conflict, depending on what actions I might take.

I have heard stories, none of which I can confirm, of site selection consultants who require payment not only from the corporate client that they are supposedly serving, but also from the finalist community that is to be objectively “chosen” as the best site. From my standpoint, that is wronger than wrong. (Yes, I know there is no such word as “wronger” but it fits here nonetheless.)

In short, a consulting engagement is not dominoes. You cannot rightly play both ends at once in terms of getting paid.

Any consultant employed by a company that would seek money from a community in order to be the chosen place in a site selection project is demanding a bribe. Certainly they are not serving their corporate master well. By the same token, any community that would cede to such a demand is engaged in graft.

I Tried and I Really Can’t

But it’s not always the consultants who are the culprits. A couple of years ago, I received an email from an economic developer offering me a $50,000 bounty to bring his community a project. Now, think about that for a moment. If I am employed by a company to provide site selection consulting services to them, I could no more take a community’s bribe money, and let’s call it what it really is, than I can whistle Dixie. (I actually tried after writing this and I really can’t.)

Similarly, I found myself squirming in my seat not so long ago when an economic developer from Ireland, visiting me here in Dallas, spoke of a sanctioned program in which the Irish government would pay me, the consultant, a bounty for every job that I would bring to his country.

I told him that I liked Ireland, which was the truth, and thought that its business and tax climate was one of the better if not the best in all of Europe. But I also said that if I were to bring a project to Ireland, it would be because I was in the employ of a company to do so. Therefore, I could not accept such a bounty.

Again, the very idea of taking money from both ends just doesn’t sit right with me. Mind you, I would not have a problem if the Irish government were to make a direct payment to a company that I represented as a financial inducement for it to locate there. That’s a different story. I have no problem in representing a company during incentive negotiations, as I believe that is a necessary component in getting a deal done.

But if I am holding myself up to be an objective site selection consultant, to serve a corporate client to the best of my ability, I cannot ask that communities pay me a pay-to-play fee. The ultimate site chosen will depend on the business needs of the company, and not some kickback scheme.

Again, we are not talking about financial incentives to the company, which I believe is a legitimate practice. Periodic talk of banning financial incentives, sometimes even by economic developers themselves (which really surprises me), indicates to me a fundamental lack of understanding of the financial commitment and risks being taken by a company when it chooses a location for capital investment.

Be assured that it is never a given that any such endeavor will be successful. If anything, incentives only hedge a company’s bet, which should be predicated on solid business reasons – you know, stuff like workforce availability, transportation infrastructure, energy costs, taxes and the like — and not incentives alone. Maybe this should be subject for a future blog.

No Quid Pro Quo

But here is where it can get a little tricky, but only if I let it. (And I won’t.)

In addition to site consulting, I do economic development consulting work. Among the different services that I offer is site certification and strategic planning. By virtue of the fact that a community has hired me to guide them through either one of these processes, the question may present itself as to whether that community should be afforded preferential treatment later down the line when I am representing a corporate client on a site selection job.

Well, I hope you would understand that the answer is no. There is no quid pro quo, but there are some caveats.

I don’t believe I can ethically give a community preferential treatment in a corporate site search project simply because I have done work for them in the past. Having said that, and this is important to note, I will probably know that site and/or community like the back of my hand as a result of my past work.

And if that site/community falls within the search parameters of a future corporate client, that it could meet the company’s specific needs, well then I will dutifully inform my client company about that particular site and community. I am simply acting on information that I have derived through the course of my work, hopefully to the benefit of my client.

But I have to be transparent about the whole thing. I will make the company fully aware of the fact that I had done work for that ED organization in the past. It’s all got to be above board. That’s just how we roll.

Now I hope I don’t come across as overly preachy with this blog. Rest assured, I’m more sinner than saint. But I do believe that ethical considerations are something that we all face in our daily lives, particularly so in business. Just pay attention to that inner voice and you will usually be fine.

Parting Quote

Now back to Larry King, who wrote an article in Texas Monthly back in August 1974 entitled “Redneck.”

King wrote about the difference between a “redneck,” whom he sees as a perpetual loser, from the aspiring “good ole boy,” which may prove helpful in our treatise on ethics. If my memory serves me right, the article was excerpted from the aforementioned book, which unfortunately I no longer possess.

The bona fide Good Ole Boy may or may not have been to college. But bet your ass he’s a climber, an achiever, a con man looking for the edge. He’ll lay a lot of semi-smarmy charm on you, and middling-to-high-grade bullshit. He acts dumber than he is when he knows something, and smarter than he is when he doesn’t. Such parts of his Redneck heritage as may be judged eccentric or humorous enough to be useful will be retained in his mildly self-deprecating stories, and may come in handy while he’s working up to relieving you of your billfold or your panties.

Be forewarned.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm based in Plano, Texas. If your company needs an optimal location for future operations anywhere in North America, we can help. If your community needs to improve its competitive standing, we can help. All requests for information are considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, but only if expressed permission has been granted.

 

 

 

 

 

Beyond the Call of Duty

In Economic Development, Places on January 12, 2014 at 6:29 am

SYLVANIA, Ga. — I submit that there are certain things in life that you can teach and thereby learn, and certain things that you can’t. You either have it or you don’t.

Now let me tell you a true story. It happened to me this past week.

So I was sitting on an airplane at the Charlotte airport, awaiting take off. It was about 5:30 pm on Sunday, Jan. 5, when the pilot announced over the intercom that our U.S. Airways flight to Savannah, Ga., was cancelled due to heavy fog there in Charlotte.

I immediately called Jason Hamman, my partner on an economic development consulting project that was to ultimately take us to Sylvania, the county seat of Screven County in South Georgia. Jason, with Ohio-based Hamman Consulting Group, had also just arrived in Charlotte and was in the same terminal when I reached him.

He said his U.S. Airways flight to Savannah was to leave at 6:30 pm. So I raced to his gate to see if I might be able to get on the same flight. But the airline was none too helpful in providing us with any useful information, until it became clear that Jason’s flight was also cancelled.

So We Decide to Drive

With no hopes of getting to Savannah by air that night (we learned from Jason’s aunt, a travel agent, that all flights were booked solid the next day) and knowing that we had a bunch of scheduled meetings on Monday, we decided to drive the four hours to Savannah and then onto Sylvania, our final destination.

U.S. Airways did make one thing clear. We would be leaving without our luggage. Our bags were somewhere there at the Charlotte airport, but we could not get them. They would be delivered to Savannah, but when they could not say.

Armed with this discouraging information, we called our soon-to-be host, Dorie Bacon, of Screven County Development Authority, to report our travails. Dorie’s board had recently hired us to provide the county with a strategic/action plan as a guide for their future industrial recruitment and this trip was to be our first on-the-ground investigative venture.

When we told Dorie of our intentions of making the drive to Screven County that night, she asked for our sizes. I didn’t give much thought to it, as I was thinking about getting into a rental car as soon as possible.

A Rental Car from Hell

Seeing red meat, Dollar jumped at the opportunity to gouge us to the tune of $317 for making the four-hour drive. When we dropped their car off in Savannah shortly before midnight on Sunday, I was feeling sort of violated by the whole thing.

But it would only get worse. On Thursday, four days later, I received my first automated telephone call from the security department of Dollar telling me that they would report the rental car stolen if I did not return it right away. I immediately called them back to report that they had their car, that it was turned in late Sunday night.

But they must not have believed me, because I kept getting the same threatening automated telephone calls — “to avoid legal action against you” — on Friday and Saturday. And I kept calling them back to repeat that the car had been turned in at the Savannah airport on Sunday night.

But forget them. Truly, I am done with that incompetent bunch. And probably U.S. Airways as well, as we got more useful information from Jason’s aunt on the phone in Ohio than we did from the airline representatives standing in front of us.

But It Got Better

We arrived at Kinchley Place, our bed and breakfast in Sylvania, at about 1:30 am Monday via another rental car. Jason and I were exhausted and feeling a bit deflated from our run of bad luck.

But here is where it got better. There sitting on a table in a large open room off from our respective bedrooms were new clothes – two white shirts, two pair of slacks, packages of t-shirts and underwear, socks, toothbrush and toothpaste and assorted toiletries.

Dorie had come to the rescue. She had provided.

I turned the light off at 2 a.m., not knowing how well I would perform at our initiation meeting at 8 a.m. with the community, but knowing that our host was thinking of us. And that made me feel better.

The next morning, we were introduced to a roomful of maybe 30 people or so, many of them local public officials. Jason and I had to get up and explain ourselves and our mission, which turned out to be easier than expected. I thanked Dorie publicly, saying that she had provided me with my preferred brand of underwear and that I was feeling very good about the whole situation now.

The Point of This Story

What Dorie did for us was both thoughtful and exceptional. It’s not something she learned as an economic developer in an IEDC classroom, but rather it’s something she inherently knew would be the right thing to do. Staring down at the new clothes on the table, all with the correct sizes, Jason and I knew we were dealing with a special person.

We would subsequently get our missing luggage on Monday night. Jason left Screven County on Wednesday afternoon and I left on Friday morning after engaging in more than 20 interviews with a variety of stakeholders.

But before I left, Dorie joined me for breakfast at Kinchley Place, which I can recommend as a fine B&B. (Proprietor Bob Owers, who gave me a useful walking tour of Sylvania’s historic downtown one night, makes a mean breakfast.)

It was there at breakfast Thursday morning that I violated the terms of my agreement. You see these interviews, foundational to a SWOT analysis that is a part of our report, were to be completely confidential. I had no intention of telling Dorie what I had been picking up, but rather incorporate my findings in our report which would follow. But I felt compelled to spill the beans to some degree.

“Dorie, I don’t know what exactly you are doing, but even among people who fundamentally disagree on certain issues regarding the county, they pretty much all agree that you are doing a great job. I just thought you should know that.”

Points on the Board

I suspect it is not a great coincidence that Screven County won its first sizeable industrial project since the 1970s with Dorie Bacon at the helm. She joined the Development Authority in May 2011.

Shrivallabh Pittie Group, an Indian textile manufacturer, announced this past October that it will invest $70 million to build its first U.S.-based manufacturing facility at the Screven County Industrial Park. The plant will employ about 250 people and manufacture cotton yarn. Production should begin by January 2016.

Latasha N. Roberts, executive director of the Screven County Chamber of Commerce, said this soon after the announcement.

“Today belongs to Dorie Bacon, one of the greats and the very definition of a woman on the move.  Her devotion to this county, the many projects she’s fought for on behalf of the Screven County people, the endless site visitations, last minute request for information reports, and the sheer joy she takes in her work have made Tuesday’s announcement meaningful in so many ways.”

Actually, there were two announced wins for Screven County in 2013. Omega Piezo Technologies, Inc. announced in April that it would open a manufacturing plant in a building in Sylvania that many thought should be razed.

But that rehabbed building looks pretty good today and Omega Piezo is going forward with plans to make high quality piezoelectric and alumina products used in alarm systems and medical devices. The plant will create about 20-25 jobs over a two-year period.

“Dorie and the Screven County Development Authority did an outstanding job putting together a great incentive package that was tailored to suit all of our needs,” said Dr. David Pickrell, President of Omega Piezo Technologies, Inc. “They made our decision to come to Screven County an easy one.”

I usually don’t brag on people unless they go above and beyond the call of duty. Dorie did for us and apparently does for others as well. And now it’s our turn to reciprocate and do for Dorie and Screven County.

Postscript

It is Sunday afternoon, Jan. 12, and I just got my third automated telephone call of the day from the security department from Dollar. Stupid is as stupid does.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm based in Plano, Texas. If your company needs an optimal location for future operations anywhere in North America, we can help. If your community needs to improve its competitive standing, we can help. All requests for information are considered confidential.

© Unauthorized use of this blog is strictly prohibited. Excerpts and links may be used, but only if expressed permission has been granted.

An Inauspicious Start; The Revolution Continues

In Energy on January 5, 2014 at 5:59 am

I do not believe in omens, although the first day of 2014 had me wondering.

A portion of my New Year’s Day was spent with the ominous duty of changing a flat tire. As I discovered this misfortune at home, I ignored my wife’s sensible counsel to call for roadside service and decided to change the tire myself.

Piece of cake. I’ve done this before, honey. No problema. But it was not the simple task that I first envisioned, as I had to first remove the spare tire, which was suspended by a cabled mechanism underneath the bed of my pickup truck.

(Yes, my preferred vehicle for the past 25 years has been a pickup truck, as I actually might haul things one or two days a year. And it compliments my cowboy boots.)

Confident in my abilities, I naturally refused to resort to the owner’s manual as that would be a sign of weakness. So I crawled under the truck where I soon became completely befuddled as to how I was to remove the spare, which was lodged up into the body and wasn’t going anywhere.

Trash Talk Galore

Back topside, I relented and turned to the owner’s manual. (Nobody was watching.) The booklet revealed that I had to assemble a provided multi-part special tool to insert into a hole that I didn’t even know existed beneath the bed of the truck. After a few fumbled attempts, I was finally able to connect the tool to some sight-unseen receiving mechanism on the truck’s underside and lower the cable-attached spare tire to the ground.

I was congratulating myself on this small victory until I discovered that I could not move the lug nuts on the flat with the puny factory tire wrench. They simply would not budge. I pushed and strained until I made myself faint.

“Sombitch,” I spat out. As I was alone, I could vent aloud and revert back to my latent redneck ways. A man and his truck are not to be trifled with, but these lug nuts were not cooperating and deserved my trailer-park, trash-talk wrath.

Having dog cussed them mightily, I retreated indoors to ponder my next move. “Having problems?” my wife asked knowingly and a bit amused.

“Just taking a break,” I said. “I’ll be finishing up soon.”

Google to the Rescue

I sat down at the computer. Maybe the omnipresent internet could provide answers. And sure enough, I found a YouTube video of a mechanic with 44-years experience suggesting that I use my foot and leg as a stronger leverage point in moving those you-know-what lug nuts.

“Now why didn’t I think of that,” I said aloud.

Armed with this seemingly good tip, I returned to do battle. And it worked. Foot power prevailed and I soon had all the lug nuts removed. The next step was jacking the truck up, which was a bit of a treacherous move with the puny factory hydraulic jack.

But we got ‘er done without any further incident. With the spare tire now installed, I had this sudden urge to drink a Pabst Blue Ribbon beer, attach a gun rack to the truck’s rear window, and go off-roading while yelling “yeeeehaaaa.” (Trust me, I don’t feel this way around my wife’s Lexus.)

Confronted with a challenge, I done whopped up on it, albeit I got a little dirty in the process. So take that, 2014.

An Improving Economy

It would appear that the economy is improving and we could have something on the order of  3 percent growth in 2014. That’s better than the anemic 2 percent growth we’ve been seeing in the past few years but still nothing that deserves a parade.

The auto industry has recovered and has posted some very nice gains in 2013 with sales of about 15.6 million cars and trucks, the strongest sales year since 2007.  Sales last year were 8 percent better than the 14.5 million vehicles sold in 2012.

The housing recovery hit high gear in 2013 with bigger than expected price gains and solid home sales. Unemployment, still a big problem, is easing somewhat with a rate now below 7 percent, a five-year low.

Were it not for a dysfunctional Washington, where compromise has become a dirty word and actual governance a thing of the past, we might actually see more gains.

And the Revolution Continues

But as I have written in past blogs in 2013, one of the biggest business stories in my lifetime is how the energy scene in the United States has so radically changed in a matter of just a few years. The fact is that prolific American shale drilling is changing the global petroleum map.

The experts have consistently underestimated the U.S. shale potential and they’re probably still underestimating the size of the global revolution that will come as a result. The combination of increased shale drilling, cheaper solar power and higher investments in energy efficiency has the potential to create a worldwide glut of oil and a sharp drop in prices.

“The US oil and natural gas revolution is gathering momentum, as companies invest more into domestic production and expand our ability to supply America’s energy needs,” API Statistics Director Hazem Arafa said. “Companies are opening more oil and gas wells, with a rising share of new investment devoted to exploration and production of oil, both onshore and offshore.”

A Competitive Advantage

All this could prove very beneficial for U.S. manufacturers, and give them a decided cost advantage in comparison to their counterparts in other parts of the world, where the cost of natural gas is triple what it is here. Don’t be surprised to see more big intensive energy-using projects – such as steel mills and chemical plants – happen in the U.S. because it.

If more equals better, then 2014 will continue this revolution with greater drilling efficiencies and more horizontal wells than ever, analysts say. Investment bank Barclays Capital projects that US upstream oil and gas companies will spend $156 billion in drilling and exploration in 2014, up 8 percent from $144 billion in 2013.

And the US Energy Information Administration’s Annual Energy Outlook for 2014 projected shale and unconventional oil production to peak in 2021 at 4.8 million b/d, or 51 percent of total US crude output, up from 2.3 million b/d, or 35 percent in 2012.

RBC Capital Markets projects a 2014 horizontal well count of 20,061 for the U.S. That number includes 12,399 wells in the Permian, Eagle Ford, Bakken and Marcellus, known as the Big Four. That compares to an estimated 18,580 wells in 2013, 10,793 of them in the Big Four.

What this means is that U.S. will stride past Saudi Arabia and Russia to become the world’s top oil producer by 2016, bringing our country closer to energy self-sufficiency and reducing the need for OPEC supply. But by 2020, the oilfields of Texas and North Dakota will be past their prime and the Middle East may regain its dominance.

With our strides in technology, manufacturing efficiencies, conservation and increased use of renewables, my gut tells me that OPEC will never have us over the barrel like they once did.  Let us hope.

But He’s a Good Yankee

The New Year has me busy. I’m headed to Georgia and will be there for five days this coming week, where I will be doing some on-the-ground investigative work as part of a SWOT analysis/action plan for a community there. I’m teaming up with my pal Jason Hamman, of the Ohio-based Hamman Consulting Group, on the project. It should be fun and hopefully rewarding for the ED group that we will be serving.

It did not take too much effort to convince our hosts that Jason is indeed a “good yankee,” who can add much value to the project. While we are there, I will introduce him to fried okra as the boy needs some proper learnin’.

A Parting Quote

Dow Chairman, President and CEO Andrew Liveris said something which I thought was spot on concerning the future of manufacturing, which I believe will always be inexorably linked to the future prosperity of our country.

“Today’s manufacturing is fast becoming unrecognizable to the generation that I represent. Today, making things cannot be separated from the work of inventing them and improving them and (being) creative with them and developing a next generation of them.”

And that’s why they pay him the big bucks.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm based in Plano, Texas. If your company needs an optimal location for future operations anywhere in North America, we can help. If your community needs to improve its competitive standing, we can help. All requests for information are considered confidential.

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