The Economist - USA (2020-06-27)

54 Business The EconomistJune 27th 2020

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Bartleby Mid-year motivational magic

D

ear colleaguesand fellow humans,

It has been a difficult first half of the

year at Multinational United Subsidiary

Holdings (mush). The pandemic has

locked down some of our operations but

not locked down our hearts. It has been

great to keep in touch with you via our

weekly Zoom meetings. I hope that many

of you have appreciated the scenery in

the background as I have dialled in from

the company yacht.

By the way, apologies to those who

weren’t aware of my decision to start last

week’s session with ten minutes of silent

meditation. Lots of you assumed that the

sound system wasn’t working and this

led to a record level of complaints to our

technology help desk. It also led to some

unfortunate interjections by those who

didn’t realise they weren’t muted; the

head of the press office has been spoken

to about his use of obscene language.

This crisis has emphasised the need

to constantly readjust our collective

mindset. In March the executive team

showed our commitment to the com-

pany’s future by taking a 20% cut in our

base pay. My Buddhist guru says that the

stockmarket rebound since then, which

means that our share options are worth a

lot more than they were in February, is

simply karma in action. So, he says, is my

ability to afford mindfulness sessions

with him three times a week.

But there is no I in company, or in-

deed in mush. Our business success is

not just down to me and the board.

Thanks especially to those of you who

are working at home while the offices are

closed. You have been remarkably pro-

ductive, as we know thanks to the keylog-

ging software we downloaded onto your

laptops in week one of the lockdown. If

the company is a happy family, then

think of me as your big brother.

Happily, flexible working creates more

time for you to interact with the company.

As ceo(which at mush has always stood

for Cheerleader Extra-Ordinaire), I like to

set an example by emailing my thoughts at

4am every morning and I can only imagine

how grateful you must be to get some

management guidance as soon as you

wake up. While I can’t be with you in the

office, the pandemic has effectively al-

lowed me to move into your spare room.

Thanks also to those of you who have

devoted time to our cross-disciplinary task

force, set up to define our corporate mis-

sion statement. Members of the task force

have already agreed on several nouns that

might fit the bill—“community” and “pur-

pose” are strong candidates—and hope to

start work on some verbs in the second

half of the year, with adjectives being

phased in during the early part of 2021.

Once we have a draft, we will put it out to

the wider community of stakeholders for

consultation.

There is also good news on the environ-

mental front. As the office lights, photo-

copiers and printers are no longer run-

ning, the company has reduced the

measure of carbon footprint it will re-

cord in its annual report. Of course, some

of you will be using more power at home

than before because you are now work-

ing there. But there are ways of offsetting

this; I hear that, with enough scrubbing,

it is possible to wash your clothes in the

bath. We are all doing our bit; you will be

thrilled to learn that the corporate yacht

harnesses wind power.

For those of you without yachts, we

are also changing our business travel

policies when the lockdown ends. Seats

in business class and premium economy

have a bigger carbon footprint, so travel

will be restricted to coach, or economy,

class (except for board meetings and

Davos, of course). Think of it as a chance

to get even closer to some potential

customers. And with so many big cities

having bike-sharing schemes, trips by

taxi will only be allowed in exceptional

circumstances.

Sadly, some workers have exited our

employment space in 2020. We are al-

ways sad to lose members of the mush

community, but every crisis is an oppor-

tunity. One reason for the downsizing is

that our new artificial-intelligence (ai)

department is coming up with new ways

to automate jobs. The great news is that

our head of ai, D.R. Strangelove, thinks

there is a lot more room for his depart-

ment to expand over the next 12 months.

Finally, please disregard those news-

paper stories that suggest mush might be

vulnerable to a takeover by a rival group.

The board is confident that, once in-

vestors get a detailed look at our ac-

counts, a takeover will be the last thing

on their minds.

Hugging you all from a socially ac-

ceptable distance,

Buck Passer, ceo

Buck Passer, cheerleader extraordinaire, updates his colleagues

from natural gas, to produce ethylene,

which can then be woven into those san-

dals, camping gear and much else besides.

The trouble is that too many big oil

companies are making the same bet. Last

year the increase in ethylene capacity was

60% higher than the rise in ethylene de-

mand, according to the iea.

The subsequent decline in ethylene

prices had little impact on companies’

strategies. In November Bernstein, a re-

search firm, tallied nearly $40bn a year in

planned capital spending on petrochemi-

cal facilities from Shell, ExxonMobil, Total,

Chevron Phillips Chemical, Aramco, Abu

Dhabi’s adnoc, Russia’s Gazprom and Ros-

neft, and China’s Sinopec. All told, global

ethylene capacity would rise by about 13m

tonnes annually over the next few years,

once again about 60% more than the annu-

al rise in demand.

The pandemic does mean that oil com-

panies have less cash for new projects.

Cheap oil is also benefiting naphtha crack-

ers in Asia, which produce chemicals from

crude, and eroding the advantage of Ameri-

can ethane crackers, which rely on gas.

Even so, the coronavirus looks unlikely

to sap individual oil firms’ enthusiasm for

petrochemicals. Extra demand for single-

use plastics during the pandemic has com-

bined with lower appetite for recycled

goods to lift ethylene prices a bit since

April. Converting ethane to ethylene is still

profitable, says Alan Gelder of Wood Mac-

kenzie, an energy-research firm, “just not

as profitable as some hoped”.  For many oil

companies facing sceptical investors and

an upstream business with uncertain

short- and long-term prospects, petro-

chemicals have the dubious honour of be-

ing among their least bad options. 7