I stopped at a convenience store on my way to work today. Parked outside was a Bluebell Ice Cream delivery truck. If you have never had Bluebell ice cream, try it the next time you are in Texas. You won’t be sorry. But that is not the point. On the side of the truck were these words —“100 years and still cranking.” That is a message of continuity.

The concept of continuity is especially appropriate on this day, for it is the 20th of January, the day we inaugurate a new president. Barack Obama will be the 44th president of a nation that has been in business for 233 years. That is continuity. He assumes leadership when the nation, and globe, is in dire financial and social distress, as did Franklin Roosevelt and a number of other US presidents. There is continuity here also. The nation and the world have never been able to break continuing rounds of financial and social displacement. But the nation and the world continue.

Now more than ever, developing a sense of continuity is essential for our industry. Recently, industry pundits have become gloomier about a quick recovery of the economy and energy prices. Most don’t foresee a turn around until mid-2010 at the earliest. ConocoPhillips’ recent announcement of a 4% layoff around the world would seem to confirm that even the majors are digging in for a long fight. And make no mistake — it now appears that that fight might be rather bloody.

But the world runs on energy, and the world is not going to shut down. From the vantage point of senior citizenship in this industry I can confirm that downturns are an integral part of continuity. This is not my first rodeo, as we say here. In fact, it is, if I count right, my fifth. Each of them has been painful, but each has given the industry a chance to refocus. And each has ended with an upturn. In fact, it can be argued that our worst performance comes not in a downturn but in the orgy-like flurry of activity in an upturn. Falling demand has killed oil prices, but low natural gas prices — in the US, at least — are due partly to the glut of gas spawned by the industry’s unbridled development of unconventional gas.

Believing in continuity places a burden on each of us and on the industry. Despite the pain and displacement generated by the current downturn, it is time to plan honestly for the upturn. We must determine demand levels and plan to meet them in an orderly fashion. We must maintain research and development budgets to develop the technology we will need to meet demand in the upturn. We must retain as much of the work force as we can. We must redouble our efforts to educate the public and ensure that we can attract the new professionals we will need to sustain and grow our industry in the coming upturn. We must avoid cutting corners that might result in increased accident rates and lower efficiency levels. Above all — and I know I sound like a broken record on this issue — we must immediately begin to manage our business for long-term sustained growth and not to meet the financial expectations of analysts and exchanges.

There is continuity in the industry and continuity in the up and down cycles within the industry. Beginning to plan for the long-term recovery of the industry even as the downturn worsens is the best way to manage this erratic continuity.

Comments