Forty years ago I embarked on a career in the oil industry that has covered decades. That career has taken me around the world far more than once. It has taken me from oil rigs to refineries, to massive tanker ships to the highest corporate towers.
I have been involved with oil ministries across the globe, yet also spent time in tiny villages in the oil provinces of Africa.
To this day I still provide consulting and analysis on various aspects of a complicated multinational industry that is critical to our country and the world.
A few days ago I was filling up my auto with gasoline, looking at the price as the digital numbers sped across the pump display and it got me to thinking how the current situation fit into those decades.
I entered the industry as this country was emerging from the first oil crisis. There had been long lines of cars at stations with no gasoline and I had even seen fist fights break out from the frustration.
Back then the price of oil went from $3 a barrel to $12 in just six months, sending families and businesses into a financial tail spin.
And, we all were required to drive at 55 miles per hour.
In 1979 this country was hit by the second oil crisis, which saw the price jump from $16 a barrel to $40 in just under a year. The second oil crisis triggered a national recession.
The actual price of gasoline at the pump over those two oil shocks went from about 85 cents a gallon to $1.40. Put into current dollars that is the equivalent of going from $2.50 to $3.65 a gallon.
That swing was huge then, but most of you have seen such a price swing several times in recent years.
During the 80s the price stabilized until around 1999.
There were minor spikes and drops, but for a long time you pretty much knew what the price of gasoline was going to be when you pulled up to the pump.
Events leading up to and during 9/11 changed that situation, as oil prices responded to panics, global conflicts and the emergence of more competition for every barrel of oil.
The price of gasoline started to track national inflation rates much closer than ever before, and more importantly to the average consumer, we experienced huge swings in the price with each new conflict or crisis.
Locally, gasoline peaked at $4 a gallon in June, 2008. What followed was a sudden and dramatic drop in the price. There were a number of reasons for that, but by Christmas that same year it had dropped to $1.60 a gallon.
Sounds like today doesn't it? If you plot the data from both time periods it looks almost identical. Global and national events impact the prices greatly, mostly driven by panic and a lack of a clear comprehensive energy policy.
As critical as oil is to this nation we have no comprehensive policy on this non-renewable resource upon which we all depend.
There has been talk of such a policy, but in my 40 years in the business it has never happened.
Every time the price of oil has dropped, it has eventually climbed again. I have charts that show the normalized price all the way back to the Civil War and that has always been the case.
Since 2001 the price volatility is very noticeable, and even with the huge increase in U.S. oil production that volatility remains.
American consumption, international competition for energy from places like China and growing unrest in regions which still supply the bulk of the world's energy, all contribute to the problem.
So enjoy the savings you now see at the pump.
Perhaps sock away some of that into a bank account for a rainy day.
The last 40 years would most certainly suggest that what goes down, will in fact go back up.