The COVID Revolution

With the great economic freight train of spring 2020 brought to a screeching halt by COVID-19, our usual supply chains buckled, broke, and then fell off the tracks. 

Our normal ways of satisfying our needs disappeared. In the midst of a scramble over the past month, in some ways we went back in time. In other ways, we went forward in time. 

I reacted to shortages at the grocery store by getting in the habit of ordering a dozen eggs weekly through my gym, which has a connection to a local farm. The eggs are very delicious, and very expensive, compared to grocery store-bought eggs. I feel very close to the land!

I admire on social media my friends and relatives home-sewing their custom face masks from old scarves and bandannas. Stylish! Unique! Hand-crafted! It’s all very Etsy.com.

I bought a 5-gallon bucket of hand sanitizer from a friend who converted his whiskey distillery to the task.1

So the question becomes, will the legacy of COVID-19 be a return to a slower pace of economic life, recognizable from a century ago? A life full of locally-sourced eggs, hand-sewn clothing, customized distillery products and of course quality time with a small family unit? Seen from a certain angle, it’s all very Little House on the Prairie. Is that our post-COVID future?

No, that fantasy is silly. That train left the station long ago.

What’s happening instead, and what will remain after, is a jump-start to new ways of doing things. 

In The Structure of Scientific Revolutions philosopher Thomas Kuhn argues that big change comes not as a slow evolutionary process, but rather in sudden paradigm shifts. What we’ve all experienced and observed in the last month of social distancing is a massive jump forward – maybe by many years – into the future of certain economic processes. Below are just a few trends that COVID-19 will rapidly accelerate. COVID-19 causes this paradigm shift, rather than evolutionary change.

The revolution in education

Online learning this month has offered an insight into the future of school and learning. For the first three week of school shutdown, the public elementary school where my fourth grader attends has worked on providing technology to all of her classmates. That technology procurement was necessary because it’s impossible to start online work if kids in the class can’t get connected. So administrators have rushed to acquire and distribute iPads, hotspots, and internet access for families for whom that was previously out of reach financially. 

Before COVID-19, they could never do much with online learning, because too many families would be left outside the digital divide.

Having solved that tech problem over the past three weeks, however, new online learning methods, assignments become both possible and necessary.

With the education world forced to adapt so quickly and so universally, will education ever be the same again? Will universities, for that matter, ever be the same? It feels like COVID-19 has forced a paradigm shift in what’s expected of teachers, schools, and kids. 

The revolution in payments

Apple_1984
From Apple, in 1984

I already used the touchless Apple Pay service before now. But I’ve noticed, to my frustration, that a huge number of retail establishments – like my local grocery store chain – never have the right kiosks to accept payment this way. If we understand that bills and coins are a germ-filled disease vector, and even that exchanging credit cards with a cashier is too much contact, then the contactless Apple Pay represents the future. COVID-19 may mark a sudden paradigm shift away from cash.

Apple, as always, sees the future before the rest of us do.

The revolution in retail.

Did we think Amazon’s deliver-to-the-door business model already threatened brick-and-mortar retail before 2020?

Of course. But the only reasonable observation to make now is that Amazon has accelerated its take-over of retail businesses in America. Much more brick-and-mortar retail will now die, much more quickly, in a step-change paradigm-shift way, not in an evolutionary way.

From the distance of time, let’s say two decades from now, my freight train economy analogy that I began this column with will seem even more quaint, and even more apt. We will look back at spring 2020 – before the COVID-19 transformation – and see the way we did things in 2020 as impossibly inefficient. Impossibly brutal, dumb, loud, linear, and tracked. Like a freight train that can only go from one point to another. So limited.
Our sleek, smart, creative, rocket ship economy of 2040 will have blasted off from 2020, no longer held back, no longer limited, by the rails of a freight-train economy.

Note: This post ran in the San Antonio Express News in April 2020…I’ve just been remiss in posting my stuff on Bankers Anonymous! Forgive me.

Please see related posts

The coming death of brick and mortar (2016 edition)

The War On Cash

A small whiskey distillery near The Alamo that is also a family legacy

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  1. Next request to the distillery: Please hook me up with a 5-gallon bucket of moonshine to tide me over during this period of isolation, as I spend large amounts of indoor quality time with my family.

Natural Gas Revolution Part I – Mad Max Bizarro World

There’s a Mad Max quality to the back roads and blue highways of South Texas these days. I’d been hearing about this strange phenomenon almost since I arrived in Texas 3 years ago, but only recently did I get an invitation to see it for myself.

I hopped in a car with a Texas State Representative this month to tour a drilling site with an independent oil and gas company in the Eagle Ford shale in South Texas.

As the State Rep and I zoom past empty acreage – not unlike Mel Gibson’s Australian outback – we spy on the horizon a small caravan of specialized tricked-out trucks approaching menacingly.  As they roar past us, we observe flatbeds full of monstrous piping overflowing with weaponized-looking plumbing on their backs.  Ironically these Mad Max vehicles forecast not the last known energy reserves on the planet, but rather the opposite – nearly a century worth of abundant, cheap, domestic energy.

As a relative newcomer to Texas I carry all my prejudices and misconceptions about oil and gas drilling with me.  Most of what I knew before my Eagle Ford visit I learned from Hollywood, via Giant and There Will Be Blood.

I found crucial differences between my preconceptions and what we saw there.

Foremost in my mind is that most people I speak with in San Antonio, not to mention the rest of the country, do not understand just how big the Eagle Ford operations are.

If my estimates of investment are anywhere near correct – something on the order of $100 Billion – the Eagle Ford dwarfs USAA, HEB, or Rackspace[1] as an economic driver of the South Texas region.

Second, the scale of financial investment forces a corporate, risk-mitigating approach to operations down there, which is a good thing when it comes to environmental risks, a major concern about Eagle Ford.

Third, the employment boom in the South Texas region is palpable.  They need more people than they have right now.

 

What is fracking and what is the Eagle Ford Shale play?

So here is as good a time as any to explain what I’ve learned about how the Eagle Ford shale ‘play’[2] works, as opposed to oil and gas operations in other times and other regions of the world.

Historically, exploiting oil and gas reserves in many places on the earth has required sophisticated geological and engineering search techniques, seeking large hidden pools of hydrocarbons that can be extracted from a vertical drill in the ground.

A ‘shale’ play like the Eagle Ford, however, is the kind of seemingly un-exploitable geological formation that oil engineers and geologists skipped over for the past century, in their search for large underground pools.  Oil and gas trapped in small bubbles between tightly packed shale rock could not be released using traditional techniques until the last decade or so.[3]

A combination of two techniques changed all that: horizontal drilling and hydraulic fracturing (fracking).[4]  The horizontal drilling allows above-ground rigs to exploit a much broader underground area from which to extract hydrocarbons, and the fracking involves the use of underground explosive charges to blast open tight rock formations, followed by high pressure water, sand, guar[5], and chemical combinations to keep rock formations open long enough for oil and gas to flow and eventually to be extracted by the horizontal pipe.

Suddenly – and by suddenly I mean in the last 10-15 years – exploitation of shale oil and gas deposits trapped in shale formations has become economically viable.  And by “economically viable” I mean the oil and gas industry has suddenly found 15 years’ worth of profitable drilling in South Texas and maybe 90 years’ worth of U.S. domestic energy underground in the Bakken, Marcellus, and other major shale regions.  Horizontal drilling and fracking has caused an oil and gas revolution.

This revolution is what the State Rep and I have come to see in Bee County, Texas.

 

Up Next Part II – No Dry Wells in the Eagle Ford

Part III – The Scene at Drilling and Fracking Sites

Part V – The labor market in the Eagle Ford

[1] To name a few overly-referenced economic engines of South Texas.

[2] ‘Play’ in this context is what oil and gas folks call it.  Also, I’ve learned that if you’re a Yank and not from around these here parts, Eagle Ford is pronounced as one word: “Eagleferd.”

[3] A little online research reveals that fracking techniques were known and used in the oil industry as early as the late 1940s, with additional advances in the technology in the 1970s, but commercially successful exploitation of shale-trapped gas, using the sand and chemical mix, dates only to 1997.

[4] I only got through one season of the Battlestar Galactica redo that came out a few years back.  I think it’s important to acknowledge the rise of their particular Galactica method of swearing (“Frack!”) and the concurrently perfected process of releasing hydrocarbons from closed shale rock.  For linguists, this may represent an important example of “multiple independent discovery” in the development of the English language.

[5] I hadn’t heard of guar either, but it’s a common cheese and ice cream-additive, derived from beans in India and Pakistan, lately applied to the fracking process.

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