Steve Heins, The Energy Pragmatist, Inc. and host Jason Spiess had a lively conversation today regarding oil and gas, capitalism and the managed marketplace. This turned out to be a point/counterpoint discussion with a big dash of humor and bluntness.
First, they discussed the current spate of bankruptcy in the oil and natural gas patch. Spiess mentioned how hard North Dakota has been hit. Heins talked about the 18 oil companies who have declared Chapter 11 bankruptcy this year. Spiess added that since 2015, over 200 North American oil and gas companies have declared bankruptcy. Heins pointed out Chapter 11 is used by companies to reorganize their finances and business model.
Spiess explain why he has been disappointed with corporate responsibilities and management bonuses given to CEO‘s before declaring Chapter 11. Spiess, both jokingly and seriously, asked the question if these CEOs were paid a bonus for doing their job and bankrupting a company.
Heins pointed out that many companies, in and out oil, use guaranteed bonuses to distribute funds to all senior managers. Spiess went on to talk about what he called the current state of the American “managed marketplace,” by which he meant the problems created by politicians and the public relations of large oil companies.
On the issue of “managed marketplace” and free markets, Heins counter-argumented that free market are a version of “creative destruction” that keeps moving toward creating more efficiencies by making more product with fewer people and assets. This is the one part of their discussion upon which they disagree.
Each made their arguments with humor and personal examples.
Finally, Heins commented on Robert Bryce and his new documentary, “Juice,” which is well-produced by Robert and well-directed by Tyson Culver. A beautiful travelogue shot in many parts of the world where electricity is a precious resource, with video from the Middle East, Africa, India, Puerto Rico, and the US. Bryce that shows how over 3 billion people still live in electricity poverty. These people still don’t have enough reliable electricity to power one single American refrigerator.
Spiess and Heins agreed there remains much uncertainty in the world, especially with the pandemic, the oil crash, and political unrest.
“Uncertainty is right out our windows and everywhere we look,” Heins said, and “It’s a volatile time.”
The Crude Life Podcast can be heard every Monday through Thursday with a Week in Review on Friday.
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