Oil update: We need security plans from policymakers

This is an excerpt of the original article. It was written for the March-April 2023 edition of Supply Chain Management Review. The full article is available to current subscribers.

March-April 2023

In June 2013, Frank Quinn stepped down as the only editorial director Supply Chain Management Review had ever known. “In thinking about those whom I’m indebted to for the success of SCMR over 16 years, there is one constituency that must rank first on the list—you, the reader,” Frank wrote, as he handed over the reins to Bob Trebilcock. Now, Bob has done the same, handing over the reins to the next generation. I am very proud to be that next generation. In a farewell letter of sorts, Bob wrote that he was the “old” and I as the “new.” Nothing could be further from the truth. There is no old or new, only continuity. That continuity is…

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This is my annual update on oil that began with my first Insights column: “Is your supply chain addicted to oil?” (Jan./Feb. 2007). Since, I’ve focused on the price of oil because freight costs are a sizable (and controllable) portion of supply chain costs. Also, because it appeared that oil prices would rise over time, it was obvious that supply chains would have to be more energy-efficient and much less dependent on oil. Initially the tagline was “supply chains needed to slow down” because highly responsive chains were energy inefficient. Furthermore, once there were climate concerns, oil got a “dirty name”—as a polluting CO2 fuel—that became another important reason to squeeze oil out of supply chains.

My last update asked: Where’s the plan?

The last oil update was titled: “Oil update: Where’s the global energy plan?” (Jan./Feb. 2022). In it, I was concerned that there appeared to be a lack of a coordinated global energy strategy to wean economies off their addiction to fossil fuels. I came to this realization after watching an interchange between host Fareed Zakaria and Tom Friedman, a New York Times columnist, on CNN’s GPS show (Oct. 10, 2021). They discussed Mr. Friedman’s column, “A Scary Energy Winter is Coming. Don’t Blame the Greens” (New York Times, Oct. 5, 2021). It included a discussion about the fact that natural gas prices were up 500% in Europe, and up worldwide as well.

My understanding (up to that time) was that there was a tacit agreement that there was a global strategy to move away from fossil fuels, by first using natural gas as a bridge fuel to replace almost all coal, and then oil use. Eventually replacing natural gas with renewables and other non-polluting energy sources.

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