Shortages and Supply Chains, Then and Now

Proud of a job well done: Jesse Perry (left) and Norris Tremmier stand in front of a 3100 hammer they have just completed assembling in a customer’s own yard. The 3100 hammer was the last 3′ stroke hammer Vulcan produced for the offshore market; compared to the 560 with the same energy, it was heavy and drove the piles no better, if as well. Although Vulcan could assemble any hammer in or near the Chattanooga factory, field assembly was practical as the hammer was easier to ship in pieces, and when delivery was tight (which it almost always was) it speeded up the process. It also gave Vulcan’s field personnel a chance to give a service school to the customer’s people. With the demise of practical rail transport and the problems of trucking such a large piece, by the 1990’s field assembly of offshore hammers became the norm.

Vulcan’s foray into the offshore oil industry with hammers like the 020, 040, 060 and 560 made the late 1960’s and early 1970’s a busy time for the company. That time received a major jolt in 1973 when the “energy crisis” began with gas lines and elevated crude prices.

That event began a process that made the 1970’s the era of shortages. Vulcan was caught in the middle by what we would call now “supply chain issues.” It made for a very prosperous period but one Vulcan strained to service. For example, the 3100 hammer, ordered by McDermott, took nearly two years to complete (6-12 months was normal for a Vulcan offshore hammer, depending on the size.) In the midst of production, the inflation of the time (another 1970’s leitmotif) forced Vulcan to go hat in hand to McDermott to increase the price! (Happily, McDermott consented to this.)

The “energy crisis” wasn’t really a true shortage of oil or gas; it was the product of multiple circumstances that came together all at once. The event that precipitated the 1973 oil shock was the Yom Kippur War, which the Arab members of OPEC (Oil Producing and Exporting Companies) protested by an embargo. The West in turn was vulnerable for a number of reasons. Europe had only begun to tap its North Sea energy resources, so it didn’t have domestic production to fall back against. (The legendary Romanian oil deposits were sort of behind the Iron Curtain.) The United States had plenty of petroleum energy even without the discoveries exploited by fracking a quarter century later. The problem in the U.S. was that its environmental movement had declared war on the oil industry long before global warming was an issue. This resulted in shutting down further exploration and production on the East, West and North coasts, and intermittent suspension of leasing in the Gulf.

In the polarised post-Vietnam War culture (which we are far from getting past) Vulcan found itself an apologist for the oil industry. As part of that it put out stickers like this at places like the Offshore Technology Conference:

The shortage reality even got into Christian music, with this from the Imperials:

And there is, really, no shortage of God’s love!

The elevated prices of crude made oil exploration and production both inside and outside the U.S. a lucrative proposition, which kept Vulcan busy throughout the decade and into the early 1980’s until the oil crash–precipitated by a change in the way oil was sold–brought the entire industry to a screeching halt.

There were other solutions at the time. The French, with little domestic oil, went with nuclear power in a big way. Although that could not at the time deal with, say, automotive requirements for fossil fuels, it did reduce their overall dependence on these sources of energy. Doing so not only reduced their carbon footprint (not an issue at the time,) but reduced their dependency on the volatile Middle East. Had the U.S. and the rest of the developed world followed their example, several costly wars probably could have been avoided.

And this leads us to the present. Today we are concerned about putting carbon dioxide into the atmosphere, but those in the driver’s seat push back against the solution–nuclear power–that the French used so successfully. As was the case fifty years ago, it is not possible for one solution to provide all of the energy, but a combination. For carbon-free energy renewables must be combined with nuclear power to obtain a consistent flow of power for our society. It’s not an “either/or” but a “both/and” proposition.

There are signs that this thinking is changing. In the meanwhile, Vulcan’s experience is a reminder that, to power a society, it takes more than one source of energy to do it. The alternative is to live with perpetual shortages which, now as then, are totally avoidable.

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