In 1982, I had a fascinating lunch with my boss's boss's boss, Arco's VP of the Southern Region, Tom Neal. This was at the height of the last oil boom. The price of oil was $32/bbl headed to $100 (everybody knew). I was a 30 something oilman wannabe, Neal had achieved significant success. He taught me about economics that day. He and the VP of the Northern Region, Tom Wilkinson (one had to be a Tom to be a VP in those days), had had a meeting with Peter Drucker. At the time of the meeting, oil had just begun to show some signs of weakness and people were expecting a slight near-term decline in the price of oil. Drucker had asked these two very savvy VP's how low the price of oil would go. Both had mentioned numbers in the low $30s. Neal then told me that Drucker asked them to tell him their worst case scenario. What is the absolute worst that could happen to the price of oil? Neal said he responded with a value of $28 as the absolute worst. Drucker told them that he thought the price would drop to $14, which is about what the price was when the oil boom started in the mid-1970s. Both VPs were aghast, but disbelieving. But by the time of my lunch with Neal, he was beginning to think Drucker was correct.

I must begin by stating that I really don’t think I am that old! Why, you might ask, do I need to say that? Well, I have just finished reading “Coal – a Human History”, which, as I mentioned at the time, was recommended by Tim Appenzeller during his talk on coal, at the Emerging Technologies Summit in Santa Barbara last month. The presentations for which have now been posted, and the DVD’s will follow soon. Since I have also just finished Big Coal by Jeff Goodell, and Time had an article on Chinese coal it seemed a good time to revisit the subject. Particularly since there were a couple of papers at the Summit that spoke to one of Jeff Goodell’s issues.

So why do I need to start by commenting on my age? Well it is because I can remember the smogs of England before the Clean Air Act came in, I can light not only a coal fire (piece of cake) but also a coke fire (you try!), I have lain on my back to hand-load coal in a seam that was, at the time, some 20 inches high, I have “black-leaded” a stove, and holystoned a curb after shoveling coal into the “coal hole”. Which made reading the book, by Barbara Freese, to some degree a voyage down Memories Lane. And, I must admit, that, not having learned my lesson, this will be, not only a book review, but also a comment on where I think folks are making a bit of a mistake in remaining complacent about the future of the world energy supply, particularly as it relates to the old King of the fuel business.