Thanks to our right hand, Chris Acker, MDN was alerted to a fascinating article in the Harvard Business Review. The very first time MDN heard Cornell professor and climate change huckster Tong Ingraffea (see Cornell Hydraulic Fracturing Expert Headlines First Meeting of New York Residents Against Drilling (NYRAD) in Vestal, NY), was the first time we’d heard of “boom and bust” cycles in relation to natural resources. During that meeting Ingraffea discussed “Gilmore’s 4 Stages of Boomtown Attitudes” and described how extracting coal, or cutting timber, etc. leads to cycles where communities are rapidly built up, only to later be devastated when that industry runs it course and leaves town–after exhausting the natural resource it sprang up to tap. Ingraffea described nightmare scenarios that awaited communities “foolish” enough to buy into shale gas development. Our response was and always has been–we’ll take that development, and any “bust” that comes with it–over never having had any investment at all! No industry stays in a particular geography forever. Back to the HBR article. The authors theorize that boom and bust–at least for oil and gas–may now be over. Why? Because with shale drillers can literally overnight begin producing more oil and gas when prices reach an attractive level. Meaning the price of oil will eventually hit and likely stay at around $50 barrel–like, forever…
