I recently saw the headline that stated in bold type that the price of crude had once again broken through $100 per barrel, and I was reminded that it wasn’t always that way.
In the 1990s, when the price of oil dropped through the floor to $10 per barrel, I was in a conversation about the future of Houston and the economy with the CEO of one of the major oil companies. He was a member of our executive committee and board of directors and I looked to him as someone who could see a little further into the future than most. After all, he was making 30-50 year investments to explore for new finds, and he had access to the best research that money could buy.
He made a statement that I think is relevant to the construction industry of today. He said, “Kollaer, we are going to find a way to be profitable at less than $10 per barrel.” He did. At the time he made that statement, the companies were drilling in about 500 feet of water in the Gulf of Mexico. They made money at $10 per barrel, and then as the technology improved, they used those profits to drill new wells in previously unheard of locations.
Five years later they were drilling at 2500 feet, and then drilling horizontally out over a mile in several directions to tap the reserves that they had discovered in the deep water. The technology made the difference. What a difference! And the technology continues to improve. Shell Oil just announced a couple of weeks ago that they have drilled a well in 8500 feet of water in the Gulf, a new record.
My thought is that the new materials, technologies and knowledge that are coming to the construction industry will revolutionize our work in a similar manner over the next ten years. And with the shortages of skilled workers that we anticipate over the next decade, new “game changing” technologies and a few “black swans” might be really good news for those companies who invest in people and technologies for the future.
Now if we could only bring some certainty to the political scene, then corporations would begin to invest the trillions of dollars they are currently holding – funds they are reserving until after they can see past the next presidential election.
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