Just short of midnight, Congress voted on fiscal policies that would avoid a government shutdown and will lift the ban on oil exports in the United States. With WTI and Brent crude a very volatile $30-ish and the Fed's decision due out today on interest rates, its going to be an interesting few days, weeks, and months ahead.
Does this mean jobs will come back? Hold your breath. A report out today says crude could be back to $100 in the next year. One day OPEC says they'll continue to pump and when the price falls a few bucks we see reports that OPEC expects prices to rise.
Does this mean the US will begin exporting crude tomorrow and it will solve our over-supply problem? No.
I think we all need to hunker down and take 2016 for what its worth: it's going to be a hard year, really hard. In the past 2 weeks I've seen some of the most talented people shed -- really good people with plenty of runway ahead of them (30-40 somethings), are now on the job market. Grads aren't getting jobs and many students are backing off from petroleum degrees or extending time in school. Cuts are going deeper than I've ever seen.
I have no economic crystal ball but what I do know is that our world needs energy. Powering the modern world requires fossil fuels. And the industry needs good people. It needs us. And while truck sales will continue to soar and Americans enjoy life, liberty and the pursuit of cheap oil, at some point prices will rise. What I find strange is that we're worried about climate change (a la Paris) but that cheap crude could actually be creating more emissions. (I guess cheap energy and the climate discussion can exist in the same breath?!)
But what I think ought to be different about this downturn is how we rebound and run our businesses after the recovery. Plain and simple. I believe our industry gets bloated, real fast. We often spend more than what we need when we could approach the value chain with more efficiency. This culture of spending and excess needs to stop. I'm tired of the rubber band...seeing spending soar and then dramatic drops. We have to find a comfortable balance. As a project manager I used to have to detail my spending and show the return on investment. And after several of my early career years of working in the downstream, I came to appreciate small margins. We just didn't have room to spend. My time most recently spent in Upstream was completely different. We spent too much often throwing resources and money at things we probably should have evaluated with more scrutiny. Why aren't we providing more scrutiny to everything we do, despite commodity prices? It's just the right thing to do and it makes good business sense.
I'm optimistic. Despite all the economic and political woes, these are indeed interesting times and we have even more interesting times ahead. But there's no better business than energy.
What do you think about the lift on the ban? Are you seeing more layoffs? Unemployed or in school right now - are you planning to stick it out? How do you think we can change the cost conversation and culture in our industry?
I'd love to hear your views.