Dean Barber

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.

© 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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  1. Good blog today. I hope thqt you have a really good 2014. I anticipate b uilding a 40,000 sf spec building soon.

    Charlie

    Sent from my iPad

  2. It’s amazing, when I read your posts I can actually see you speaking every word. I’m so proud of you. I honestly thought of contacting you about the community development desires here in Augusta (Georgia). Maybe when you’re here next week you’ll look us up. Happy New Year to you and yours. Sharon

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