“Tis an Ill Wind…

…that blows nobody good.” That old sailor’s proverb, first recorded in 1543 and further popularized by Shakespeare in “Henry VI” in 1623, is as plain today in its meaning as it was almost 500 years ago. Anything that is bad for someone is probably good for someone else.

It’s especially true in business. The failure of a company is a terrible event for its owners, employees, vendors and customers, but clearly offers opportunity to its competitors. A hurricane is rightfully characterized as a disaster, but it may not be such for contractors or lumberyards. Droughts are bad for farmers and ranchers, but generally benefit beach resorts. The effects of Moore’s Law place ever-increasing margin pressure on vendors of computer equipment, but the rest of the business world benefits from enhanced productivity.

oil scaleEnergy costs are one of the most far reaching examples of this dichotomy. Oil prices (at 85% of their foreign exchange) have propped up the Russian economy, despite sanctions over Ukraine. If they fall too far, it may destabilize the situation in Eastern Europe much further. Despite that, thousands of businesses would celebrate the savings from decreased transportation and chemical costs.

Natural gas prices have recovered from their lows of early 2012, but remain far below the averages of the middle 2000’s. Producers frequently flare off the gas from oil wells, rather than try to take it to market. The gas producers want to convert LNG importation facilities for export, since prices are far higher in Europe. The chemical producers, enjoying cheap feedstock for plastics and fertilizer, want the plants left alone. Local governments on the Gulf Coast stand back, afraid of offending either large-employer base.

What effect do swings in energy prices have on your business? Please answer my one-question survey here. No respondent information is collected, and you can see the current results instantly.

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