But have you ever thought about blaming the Internet and/or those 24-hour cable news stations?
Those could well be a couple of the big culprits, according to Richard Costello, who is a partner with Acela Energy Group of Norfolk, Mass.
He was a speaker at the Food Marketing Institute Energy & Technical Services Conference that took place in September. There will be a number of stories on this event in the Nov. 3 issue ofThe NEWS. But for Powell’s Ponderings in this issue and in the Nov. 3 issue, I want to comment on a few developments from that event that fall outside the framework of straight news stories.
In his talk titled “How High Is Too High?” Costello put up a slide that showed more than a dozen factors in rising oil prices including demand in China, Middle East control of the majority of the world’s oil reserves, storms in the Gulf of Mexico, and political instability in oil-rich regions of the world. But he argued that instant access to such issues on the Internet creates a sense of panic pressure that could well be contributing to sharper spikes.
For example, he said that in the years before the Internet, “Nobody knew about a crisis in (petroleum producer) Nigeria. So we didn’t worry about it.” And that lack of knowledge could well have held down the size of a hike. Today, he maintained, portions of spikes are based on unfounded speculation breathlessly reported non-stop as fact.
He does make an interesting point about the changes that have been taking place in communications. I started as a journalist many moons ago working in the newsroom of a daily newspaper. A teletype (sort of a mechanical typewriter) would type on long rolls of paper various news stories throughout the day coming in over phone lines from reporters throughout the world working for various wire services. For an afternoon newspaper (now I’m really dating myself), we editors would glance through those “wire” stories each morning and pick a bunch to fill the paper, along with the local stories written by staff reporters on manual typewriters.
Decisions on world news stories that would appear in print were made by 8 a.m., and the newspaper reached readers about 3 or 4 in the afternoon, after the newspaper carriers had gotten out of school for the day and delivered the papers. We editors could have cared less about world news after 8 a.m. until the TV network newscasts (from just three networks) came on at 5:30 p.m. each evening.
Today, dozens of news and business networks are grinding out information 24/7 on television and thousands are doing so on the Internet. Stock market numbers are on the screen every minute of every business day and prices on barrels of oil are noted minute-by-minute. Potential crisis that could negatively affect prices are reported always from a worst-case scenario.
It is, to me, information overload. I think Costello might be right in contending that too much news may not be good news.
GOOD INTENTIONS GONE ASTRAYCostello also brought up another interesting point that shows how good intentions on one side can have negative effects in other ways.
He noted the rising cost of oil is motivating many well-intentioned decision makers to encourage the use of bio-fuels, especially those that use ethanol. The problem he noted is two-fold. First, ethanol uses corn it its production equation and, second, the government is subsidizing farmers to grow corn for ethanol to a greater extent than corn as a food product.
“So farmers would rather raise corn for ethanol than for food,” he said. And that, he said, is one reason for the rising cost of so many food products that have corn in their ingredients - not to mention the rising cost of transportation of food products due to rising oil prices.
Costello did say that those managing energy issues in supermarkets need “to control what we can control.”
The same might apply to any contractor. Do what you can do to control the costs of running your fleet - and ignore cable news and the Internet as much as possible.