Where To Pump Big Oil Profits?

The LA Times reports that Big Oil  projects earnings of nearly $100 billion – both this year and next. Like any business, these companies must now choose what to do with the money. Here are the choices laid out in the article:

1. Invest in more production, refineries and distribution
2. Slap the industry with a windfall tax
3. Mandate the industry put money into alternative energy research
4. Reward shareholders with dividends and stock buy-backs
5. Diversify by going into non-energy related businesses
6. Consumer rebates

This is a reasonably full list. Note, however, the language, especially “slap” and “mandate”. Each of these options get described in terms of Congress forcing the industry to take steps, as opposed to the industry taking such action itself. In addition, it’s worth noting that the alternative energy suggestion is phrased in terms of research instead of results. It’s a tentative exploration instead of a commitment to outcome-based goals.

It is doubtful Congress would take such action. Still, if they did — or if the industry were to find some way to work together like the semiconductor industry did so successfully with Sematech — each effort would have dramatically increased odds of success if they focused on results instead of activities. Performance is the primary objective of change, not change. Any effort to find a blended, more sustainable approach to energy would benefit tremendously by first setting a goal such as: “By 2010, at least 20% of energy uses come from alternative sources.”

If Congress were to mandate (and follow through) on that, this industry — filled with dedicated, talented and creative people — would deliver. If Big Oil were to use a healthy chunk of their profits to create their own ‘Sematech” with this kind of outcome-based goal, they’d succeed.

And, when they did, all of us — and all of our children and grandchildren — would be better off.

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