What If? and Then What?
Written by: Rod Garland
You’ve all probably heard that, “In this world nothing can be said to be certain, except death and taxes” or some similar quote, often attributed to Benjamin Franklin; Daniel Defoe; Christopher Bullock; or even Mark Twain. You could say that I’m not actually certain who coined the phrase first.
One thing is certain however, and that is that the markets and investors don’t like uncertainty.
Another is, that unless you are Nostradamus, with mystical powers beyond mere mortals, most forecasts carry about the same weight of accuracy as guesses and generally prove to be wrong more often than not, as in that the outcome is always uncertain.
“It’s tough to make predictions. Especially about the future!” (Yogi Bera)
To bolster their own confidence and support their conjecture, some claim that science is the foundation for their predictions and use terms like trend analysis of data from passed similar occurrences to project into the future, and while this seems a reasonable approach, “the proof is always in the pudding”, and that pudding doesn’t always taste that good.
We have evidence of this in many spheres of life, and we all know how difficult it is to accurately predict anything. You only have to plan an event or a golf game and check on weather forecasts, even just a few days prior, to realize that these are not always reliable, even with the aid of technology, with satellites and monitoring sensors spread across the globe.
Another example is with elections, the Clinton campaign thought they were coasting to a comfortable win during the last US presidential elections based on predictions that used vast amounts of sophisticated polling data. I shouldn’t have to remind you what happened in that case that confounded the “experts” when the Trump card was played at the last minute.
The success of predictions depends very much on the vagaries of variables many that are unknown or beyond control. Nothing is ever certain.
If we really could predict the future accurately, I’m pretty sure we would all be very rich by now and many of us likely floating around in a luxury boat, catching some rays with a suitable beverage in-hand off some Mediterranean island coastline.
We do however still have to try our best to anticipate future events in order to decide which path we should take and we develop business plans for the ways in which we intend to spend our hard-earned money and produce a budget that demonstrates consideration and deliberation has taken place.
This is generally a requirement of banks, lenders & investors as a mechanism by which they can evaluate proposals from businesses and individuals prior to any financial participation. For them it’s all about return of investment, risk reduction and a guarantee or at least some level of certainty of a successful outcome.
In the Oil & Gas Industry it is also necessary to have Emergency Response Planning, this is based on contemplating what could possibly go wrong by developing contingencies and defining what actions will be taken should such an event occur. Pretty much it is a case of plan for the worst and hope for the best and recognize that Murphy’s law could kick in at any time, essentially what can go wrong, will go wrong.
The CAGC facilitates emergency response for members involved in the transportation of explosives for the seismic industry in the event of an explosives incident and has this year developed a new assistance plan (ERAP) using a national third party service, who will immediately respond anywhere in Canada should there be the need.
What If? And Then What?
What if there is a 100 year flood or fire; the ones that now seem to come around every 10 years or so. Then what? Most businesses in the Oil & Gas Industry are I believe somewhat prepared, maybe not well prepared but at least most Governments & Businesses have a plan and we have experienced such disasters in the past e.g. the Calgary floods of 2013 and the Fort McMurray fire of 2016. On both occasions lives were saved from the ensuing response, in the case of Fort McMurray, familiarity with the emergency response process by workers in the Oil & Gas community was considered contributory to this success.
As individuals, I don’t think we have the same level of preparedness, many of us, don’t have spare money and supplies stashed away to survive more than just a few weeks without assistance from government handouts and welfare.
Challenges come in many forms; earthquakes; volcanoes; tsunami, fires, floods, pandemics, murder hornets, killer bees, pestilence, wars, insurrection, terrorism. Many that could have dramatic economic consequences.
Urban planning is important and limiting human habitat construction away from areas that have the potential for harm, particularly in areas next to, or downwind from a volcano, on coast lines, in flood plains, in forests without fire mitigation in place are all important considerations. Construction techniques should reflect the risks so that buildings can withstand tornadoes and earthquakes
Who would have thought that human life could be endangered so quickly from the emergence of a tiny virus about 125 nanometers in size, which is 0.000125 millimeters.
A good lesson to be learned by Governments, companies and individuals from the Corvid-19 pandemic is the inadequacy of most emergency response plans. The reliance on global trading partners to supply necessary drugs, PPE and equipment in timely fashion at reasonable prices was not easy to predict and was exposed as lacking.
Suddenly the guy stocking the grocery shelf was elevated to the status of an essential worker as was the case with the rest of workers in the food supply chain. Truckers delivering food, drugs toilet paper and hand sanitizer, who were an annoyance to most drivers on the road before the pandemic, suddenly were being applauded for continuing to work through the shutdown.
With the current pandemic still affecting everyone’s lives, in Alberta and Western Canada, in general many of us have been closeted in our homes. We have become familiar now with new terms such as “flattening the curve” and “social distancing” and many of us now don masks when around others and have improved our personal hygiene practices.
Work habits have changed. Zoom online delivery of courses, webinars and meetings have removed the need to commute to an office downtown and affected gas consumption in a big way and in some cases eliminated the need for a second family car.
People will always need the basics for life that includes, food, water, energy (heat & light), shelter, sleep, social (physical & emotional) interaction and a purpose for life. You could add to that a peaceful and healthy environment which is being challenged on a daily basis even in countries that are considered to be advanced and “civilized”.
Many of us have for a three month period foregone dining out, attending or participating in sports and entertainment, quit international or even domestic travel and all that has led to a demise of those industries and a reduction in the quality of life.
It reminds me of another saying you can give up “wine, women and song” or “sex, drugs and rock & roll”, you won’t actually live longer but it will seem way longer.