Suspension of Disbelief

Regular readers of this space will recall that once upon a time I was going to be a literary scholar and probably write lots of books about English lit that no one was ever going to read (except for other literary scholars), in sharp contrast to my current career arc in which I’m going to write lots of books and journal articles about Strategic Management that no one is going to read (except for other Management scholars). It’s progress, believe me, at least for a certain definition of “progress.” In any case, there’s a news story this week that makes me wish I was still deconstructing fiction, because then I could claim to be a legitimate expert on suspension of disbelief – that convention where you, as the audience, KNOW that the story you’re reading isn’t/can’t be true, but you suspend your disbelief for long enough to enjoy it…

Unfortunately, this story appears to be true. A report appearing in the Daily Kos website indicates that while the Republicans were spending the summer beating the drum for new and better drilling rights in environmentally sensitive parts of the U.S. so that the big energy companies could lower the price of oil and gas, the Department of Energy was contracting to sell off enough natural gas to run 1.4 million households annually to the Japanese (and other Pacific Rim nations) from the Alaskan reserves we already have. That’s right, folks; at a time when prices here were crippling the economy and leading to what is being called the worst economic crisis since the Great Depression, your government and Big Oil (it was ConocoPhillips and Marathon, if anyone’s counting) were working together to export energy reserves and maintain artificially high prices…

Now, this blog is about business, not politics, and I’m not going to start writing about the excesses of the current regime (I’m a doctoral student; I don’t have time for that). And in fairness, we should probably all remember that the Daily Kos isn’t exactly the most moderate and well-balanced news organ around. I’m just going to note that if this story is correct (and it checks out so far; I’ll keep you posted) then what we have here is some of the most unethical business practice I’ve seen in at least two or three hours, and false advertising into the bargain…

You know all of those petroleum industry television commercials, where they talk about how much oil and gas we have right here in America? It sounds great, doesn’t it? We could totally drill out all of our own oil and gas, tell the OPEC nations to take a flying leap, and have total freedom from little issues like international finance or economics. Or reality, apparently. What these ads seem to be ignoring is that energy is an internationally-traded commodity, and the oil companies are going to sell their product to whoever will give them the best price for it, just like anyone else. Which probably seems unpatriotic, or at least heartless, in the current climate, but as I’ve noted before in this space, the alternatives are worse. It’s just that the natural gas move detailed above is, well, stupid, for a number of reasons…

First, it’s a colossally bad public relations gesture for an industry that is already having severe image problems. People didn’t need more reasons to hate ConocoPhillips and Marathon, especially with winter coming, but this will be a good one. Second, there’s the potential for political fallout. If enough of the voters decide that this is yet another case of the Bush Administration putting their friends in the oil business ahead of the American people it could easily contribute to a Democratic majority in Congress as well as a Democratic President being elected, which will probably not be a good thing for the petroleum industry and its plans to acquire new cheap drilling rights. And third, if the high price of energy contributes to the current economic crisis, then people will have less money to spend on things like gasoline and huge wasteful vehicles that squander it…

It’s said that a rising tide lifts all boats. If that’s true, then the converse must also be correct: pulling the tide out from under the consumer will come back to bite the people doing it in the long run. The fact is, even if you ARE a stockholder in one or both of these oil companies, this is still not serving your interests. And if you’re a Republican of any kind, particularly a political hopeful, you’ve got to be sitting there shaking your head in disbelief…