I find Energy Marketing an interesting subject. With gas hovering near $4 per gallon and a barrel of crude running $111 consumer confidence hits an all time low every time one looks at the gas guage - your constant daily reminder of how things are. Now, the oil companies say that profiting $20 billion per company per quarter, or $120 billion over all last year is in line with what other companies make - and given the cost of exploration and development, it seems oil companies may not be making enough. So here I am on their side.But where I am not on their side is when they raise the price of gas because they say they have a "fear" that something "might" happen - that we pay through the nose retail because of their lack of confidence. That's a leadership issue and it lands squarely on Washington's dinner plate. Of course the middle east enjoys the $111 a barrel scenario because it funds the massive infrastructure construction projects going on in Dubai and elsewhere. Is Washington building itself a retirement community, a VIP Leisure World in the middle east at American's expense?
But I'm off point. My point was, "How will you know when we're really out of gas?"
Back in the day I was brought in from outside to save several accounts at Leo Burnett. The term they used in my offer letter was to "bring a breath of fresh air" to accounts such as Kellogg, Philip Morris, Nestle and McDonald's. A rare opportunity given that Burnett is very well known for not hiring outside the company. Anyway, early on, I was asked what I thought about Philip Morris' pending purchase of Kraft by EVP Client Service William Lynch. I told him my read was that tobacco was becoming politically sensitive and that PM was preparing to reduce its dependency on tobacco profits. I was scoffed. But sure enough, within 5 month Philip Morris had acquired Kraft. Vindication sure tastes sweet. PM dependency on tobacco profits plummeted from 96 to 56 percent, with the acquisition of Miller dropping that figure to around 46 percent.So how will you know when America is really out of gas? When the oil companies start buying other companies. They'll be in a scramble to reduce their dependency on oil profits.
But right now there is no sense of urgency. And that's because the oil companies know they have years of oil profit ahead. That's also why they've only dumped a paltry $3.5 billion into alternative energy. Just enough to keep the pliable liberals and global warmers happy. So what's the conclusion? Right now there is no gas shortage, we are overpaying at the pump, face time with Congress buys Big Oil a little more time while we idiot pawns feel vindicated Big Oil's getting its wrist slapped by Congress - they are the actors and we are the audience. Will you applaud, or ask for a refund?
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