Thank Goodness for High Oil Prices

Oh, don’t worry. I’ve already set up a special email filter in anticipation of all the hate mail I will receive for this right-wing stand. No doubt, the title of this article raised your eyebrows a bit, and perhaps your blood pressure, but hear me out.

Let’s look at some high-level facts. During the century-old oil consumption market in the U.S., the only period when consumption has actually decreased was for a brief decade from the early 70’s to the early 80’s. What happened? Two things: Gas prices soared during the ’73 oil crisis while simultaneously the EPA, which was officially formed in 1970, had begun to actually bring about change in the lives of everyday Americans.

Now, I’m not here to say that EPA regulations were flawless. I recall as a teenager, rebuilding an old engine with my dad and wondering why there were belt-driven air pumps that did nothing but force fresh air into the exhaust. Nonetheless, forming the EPA was a first step toward conscientious environmental protection.

So, whatever your theories on the cause for oil prices today—be it the war or peak oil projections—one thing is true: recent prices have caused the first noticeable decline in our insatiable oil consumption to ever occur in my lifetime (Reuters, 5/06/08).

What can we learn from this history lesson? Oil prices in the 70’s forced a market shift and ultimately lead to the popularization of gas-efficient smaller cars (Which, incidentally, killed the muscle car. That does make me sad. But it was for the greater good.). So, I say “thank goodness for high oil prices” if indeed ten years from now we can look back and realize that the price pinch forced us into greener technological solutions for energy, transportation, and lifestyle.

Green: To Begin or To Become

Last week, HP made public a list of its largest suppliers as part of their annual Global Citizenship Report. According to Judy Glazer, director for HP's Global SER Operations, the greater transparency is intended “as a mechanism for accelerating the effort to raise standards across the industry.” HP hopes to create greater accountability for their vendors to become green, no doubt, in an effort to uphold HP's own environmental responsibility.

As I thought about the potential impact of this report, I couldn’t help but become skeptical over the prospect of actually catalyzing change on such a large scale. I began to wonder, is it more practical to become green starting with an existing product design, components, and manufacturing processes... or would it be easier for people like Judy Glazer to simply strike out on their own with a new start-up green business? Or, better yet (for HP, that is), for HP to spin off a new company to meet the demands of green manufacturing.

Without a doubt, starting up a new company presents many challenges of its own. But, each of these HP suppliers will have to make dramatic changes to their own well-developed products individually. Then, one must also ask the question, if HP went back to the drawing board and redesigned their products to be eco-friendly, wouldn’t their component specifications change entirely, thereby requiring a new vendor list altogether? Is reforming each individual component of an existing system without changing overall business operation really the way to bring about monumental change?

A friend of mine recently launched Symphony Motors—an electric car company in Indianapolis—and expects to have a product on the market by 2009. He is using components and suppliers that are rarely seen in the Detroit industry. Many of his engineers and vendors were dismissed from major automobile manufacturers for thinking “too creatively” and threatening to "rock the boat." Today, Symphony Motors is well on the way to being a part of what could be the biggest market disruption in history.

So, where does your company stand today? Can you become green? Or, will you go back to the drawing boards in order to begin green?