I spent this past weekend sightseeing in Washington DC. Had a blast, but let me spare you the tourism and skip right to something interesting. Being in marketing, one thing I always notice when I travel is the advertising, and how it changes from location to location, and gathering place to gathering place. In DC, I saw a lot of ads for seemingly indestructible Panasonic “Toughbook” laptops targeted to the military sector, with witty block letter press conference messaging such as “Legally, we cannot say it can take a bullet” and “Legally, we cannot say it knows where Navy SEAL team three is.” Meanwhile, venture into Philadelphia or Detroit, and Pepsi’s multi-million dollar ad campaign for whatever new color Mountain Dew comes in presents its sell messaging encoded in street lingo, spraypainted on a brick wall. Consider yourself profiled by marketing, based on where you’re standing, at all times.
The most interesting ad campaign I encountered in DC was an anonymous one asking a compelling question: “Do you own a US oil company?”
What a question… This is shock marketing at its finest. It’s more effective than Alicia Silverstone stripping nude for PETA or some shit, it’s truly engaging: That’s a question that will not only stop anyone dead in their tracks, but pull them in. It’s like asking, “Does your dog have AIDS?” It’s such an important question, with so many implications, how could it not have crossed your mind previously? You start examining the message. You ask yourself, “Shit, does my dog have AIDS? How do I know?” …As marketing’s magic lasso tightens around your neck.
The question is answered with a pie chart, with the heading “Look who owns America’s oil industry.” The biggest piece of the pie is 29.5% in mutual funds and other firms, and who is poking out of that pie piece but a hard working black construction worker- the very opposite of the greedy, spoiled, cigar smoking white fat cats the populists assume are pulling the strings. 27% in pension funds- grandma and grandpa. 23% to individual investors- you and your buddies. 14% in IRAs- good ol’ farmers. And finally 1.5% to corporate management, and 5% to ‘other institutional investors.’
Of course… My immediate reaction was an emphatic “BULLSHIT!!” And I started looking for holes in the presentation, which I found was the result of a study by Robert J. Shapiro, commissioned by API, an advocacy group representing the petroleum industry. I know how marketing works, and I know that you can take statistics and construe them to support any argument. I do it all the time.
Well, the numbers are right. This breakdown of who owns stocks in big oil is legit. When Exxon Mobil reports “record earnings of $39.5 billion” despite outrageous gas prices during a war for oil, people freak the fuck out. But out of that $39.5 billion, $32.6 billion is fairly distributed to shareholders public and private, and the entire US economy benefits- including grandmas with pension plans and everyday folks with mutual funds and IRAs. Since big oil is such a big part of our economy, it’s completely naïve to think that a reduced dependency on oil wouldn’t have negative effects on more than just the fat cats’ wallets.
Another completely naïve notion is that corporate greed is the reason gas prices are so high. I’m not an economics expert and I don’t understand all the ins & outs the global picture, but I do know that in a world that runs on oil, India and China are going through a period of rapid economic growth, and their combined populations are something like eight times that of ours. I do understand the concept of supply and demand, and it’s fairly easy to see that our dependency on oil grows, as our sources do not, in a pretty even ratio to the rising cost of gas.
The problem with dependency on oil is definitely a global one. As of April 10th, the broad US stock market had fallen 7.08 percent. But the UK market fell more than 8 percent, the German market more than 10, the French about 6, and the Japanese about 7. China and India? About 19 and 26 percent, respectively. Every single equity market in the world but one recorded a loss year to date, the exception being Finland who managed a slight gain of 0.25 percent.
But what’s got Americans worried isn’t so much that 7.08 percent market loss relatively even with the rest of the world, but the dropping value of the dollar, and all this talk of a looming recession as the US continues to buy more from all of our trading partners than it sells to them. Again, I’m not an economics expert- I’m not even really much of an economics enthusiast- but I can grasp that this imbalance spells, at least, higher interest rates and slower national growth.
The fact is, the American people need to decrease spending and increase saving (investment in the economy). Meanwhile, it would be great for us if the rest of the developed and developing world saved less and spent more in pursuit of more growth. And there are some other more complex factors that I’m not going to try and present as if I understand them fully. I read something about China and other Asian export nations giving artificial support to their currencies? I got lost pretty quickly.
But let’s talk about the logistics of a decreased dependency on oil.
Yes, the immediate economic effects would be negative. And clearly visible to many regular Joes. Vanguard Group, who holds my 401k plan, is the third largest shareholder in Exxon Mobil stock. The question is, to what new energy markets would my investment best be moved?
How about corn? The US government pays out anywhere from $1 billion to $10 billion each year in corn subsidies. One reason, as crazy as it sounds, is to secure a food supply for the nation in the event that we are under seige- sealed off- by either a physical force, or a global embargo, or some global epidemic that we somehow manage to otherwise quarantine. But with that ridiculous joke of a notion aside, a more compelling reason lies in our hunt for “energy security,” a hunt which a few folks are convinced will end once and for all at ethanol biofuel. So is corn the new oil?
No fucking way.
The main problem with ethanol biofuel from corn, is that it’s just not efficient. David Pimentel, a professor of ecology at Cornell University (who has been studying grain alcohol for 20 years) teamed up with Ted Patzek, an engineering professor at Berkely to check it all out. Together, they found that while ethanol contains about 76,000 BTUs per gallon, producing that ethanol from corn takes about 98,000 BTUs- from the tractor that plans the corn to the energy needed at the processing plant. It’s a net energy loss! By comparison, a gallon of gas- from drilling the well, to transporting it through refining it- only requires about 22,000 BTUs.
Another big problem: To fill up a gas tank with grain-based ethanol fuel requires the same amount of grain it would take to feed a person for a year. If every car in the US switched over to grain-based ethanol, we’d need enough grain to feed 6 billion people– the entire world’s population- just to run our cars, not to mention eat. So it’s an even less sustainable energy source than oil.
If you ask me, my money would be on algae. It’s about 500 times more productive per acre than corn, it wouldn’t compete with our food resources, it reproduces like fucking crazy fucking anywhere, and it also doesn’t mine and desertify soil like corn does. Algae also happens to provide most of the planet’s oxygen- oxygen of course being much preferred to greenhouse gases.
But… I’m way out of my jurisdiction, aren’t I? I mean, I’m in marketing, not economics. And the bottom line is that I’m genuinely impressed by this marketing campaign that effectively delivers an incredible point:
We are big oil!
I can’t find a reason to disagree with that statement, but I’m pretty sure there are plenty of other things we could be that would be better for the environment and the economy.
We could start by being smarter.