Fossil fuel pessimists panic: the good news is the bad news is wrong
In the eighties, when today’s cutting edge analysts were earning gold stars and smiley faces for tying their shoe laces correctly, the late Ben Wattenberg wrote The Good News Is The Bad News Is Wrong. Published in 1984, it’s available on Amazon, starting at 1 cent (used) and chock-full of facts, stats and, especially, myth-busters about the decades that shaped Boomer-world.
No, we don’t get an Amazon commission.
Wattenberg’s book was published when the nation – and the world – was recovering from back to back oil shortages triggered by Middle East crises in 1973/74 and 1979/80. Fuel prices spiked, panic buying erupted, gas lines grew and young Boomers, already rattled by rising dependence on foreign oil after U.S. production peaked in 1970, were ripe targets for disaster scenarios of all types.
And, naturally, there was no shortage of “experts” to assure us the sky was indeed falling. All over the place, apparently.
For starters, world oil would run out in 45 years and vital raw materials would be gone even sooner. But it didn’t matter because pollution or the newly-arrived ice age would kill us all off before then.
Today, Boomers deal with falling skies a little more skeptically than we did back then. A lifetime of constant learning and adjustment – we Boomers call it experience and adaptation – helps us to put things in perspective.
Consider, for example, gyrating fuel prices. OPEC power crumbled after the 1979/80 crisis in the wake of attempts to artificially maintain panic level pricing. The result was twenty years of cheap fuel that ushered in the SUV era.
Nothing lasts forever: prices eventually rose again. Eight of the ten years 2006-2015 saw gasoline average $3+ a gallon.
Pessimists felt vindicated. But Boomers who didn’t skip Economics 101 back in the day were not surprised when, spurred on by the profit motive, oil producers discovered new sources. By 2015 daily U.S crude oil production (9.4 million barrels) was close to its 1970 peak (9.6 million).
And it’s not just production that is up; proven worldwide reserves of oil and natural gas have both more than doubled since 1980. Must be that Economics 101 thing at work.
Now, despite soaring global demand we are in a fuel glut again. According to Reuters, energy companies are struggling to find new markets and ways to store the stuff.
All this is good news because, when EVs really, really, take off – maybe by mid-century – all that pesky fossil fuel will be generating most of their electricity needs and powering the heavy equipment needed to build the infrastructure.
Heck, boys and girls, them big ol’ Caterpillar earth-movers ain’t gonna run on no AAA batteries.
Boomer adaptability: gyrating gas prices – been there, done that
Clearly, Boomers have a long view of fuel pricing – and the attendant personal, political, environmental and auto industry implications. We’ve been there, done that all the way from 36 cent gasoline in 1970 to $2.45 in 2015 (U.S. Energy Information Administration / EIA).
There were plenty of ups and downs along that 45 year road – and let’s not forget what our parents told us about the 1950s. Obviously, to understand what it was really like for Boomers to experience the ride we need informed then-and-now comparisons.
- Current dollar comparison … what gas actually costs at the pump. In 1970 we paid 36 cents. In 2015 we paid $2.45 – a 575% jump. Ouch!
- 1970 constant dollar comparison … adjusting the buying power of money for inflation, we see $2.45 in 2015 actually buys the equivalent of 40 cents in 1970 money. Wow, only 40 cents a gallon … let’s go fill up!
Hmm, measured in terms of Americans’ buying power – constant 1970 dollars – prices have remained fairly stable. In fact, drivers today are getting a great deal, We’re paying 10% more than in 1970 but getting twice the fuel economy from modern cars – so we’re spending less of our income on gasoline than 45 years ago.
So, what part of Boomer adaptability is hard to understand?
It’s weird, but despite dealing with the roller-coaster ride of gasoline pricing – and boom or bust headlines – Boomer adaptability is a tough sell on Madison Avenue. Here, only the 18-49 demo is thought capable of switching its buying behavior, and orthodoxy is rigidly enforced.
Like an 1996 EV1 owner rationing power on a trip to the closest grocery store, adland’s Don Drapers restrict the creative energy of their new Millennial hires to a narrow, safe range.
Too bad. The enormous fifty-plus marketplace is so close at hand for those with enough imagination to visit. The courageous few who venture in will find the space dominated by a single generation – Boomer-Plus, born 1940-1966 – that represents the third largest economy on the planet.
Think of Boomers as vast, untapped energy reserves to power brand growth. All that disruptive thinkers need is an experienced drilling crew to start the gushers flowing.