Energy Return on Energy Invested

Oil has had an enormous impact on the productivity and development of civilization - - especially in the area of transportation. We are where we are mainly due to cheap energy - - BTUs that have easily flowed to the surface or were easily mined. We did the rational thing - - we exploited the cheapest energy sources first.

We have several huge energy problems - - one of them is not running out of energy. The problem is that the new sources of energy are more expensive to exploit. Look for the "Energy Return on Energy Invested" ratio to become an important metric. During the 1930s, our energy return to energy invested was about 100 to 1. We got 100 barrels of oil for every one barrel invested. In the 1970s, the ratio dropped to 30 to 1. Current estimates on the the ratio range from 20 to 1 to a low of 16 to 1. Tar sands and ethanol have a ratio in the single digits. If we were a giant company - - our return on capital would be falling. Energy is roughly 4.5% of the global share of GDP. With higher extraction costs, the energy share of GDP could skyrocket, squeezing other forms of investment, like infrastructure improvements.

We are seeing a future of both surging energy demand and higher extraction costs. The higher extraction costs will have a huge negative impact on productivity - - at the same time of medical cost pressures and changing demographics (What about a world where medical care and energy combine for 30% of GDP?). Not what we need.

My Water Footprint

Provided below is an estimate of my water footprint per day during the month of September. There are two components to this estimate. The first is the actual water consumption as measured by the water meter. This includes water for cooking, showering, watering the yard, etc. The second is termed "virtual-water." Virtual-water content is the water embodied in a service or product, not in the real sense, but in the virtual sense. It refers to the volume of water consumed or polluted for producing the product, measured over its full production or service chain.

My estimate per day:

• Water consumption at the water meter - - 231.35 gallons. September is a large water consumption month in Texas due to landscaping and lawn water needs.
• Water consumption for food - - 446.56 gallons. Roughly twice the actual consumption. Examples include 1,857 gallons of water required per pound of beef and 400 gallons per pound of eggs. Estimate was based on actual food consumption for three meals.
• Water consumption for drinks - - 230 gallons. The same as the actual water consumption. Examples include 55 gallons per glass of milk and nine for a cup of tea.
• Water consumption for electricity - - 2,521 gallons. Electricity for lighting, appliances and air conditioning - - September is a high air conditioning demand month. My electricity comes from a nuclear power plant - - Comanche Peak Nuclear Power Plant, located 60 miles south of Fort Worth. On average, 43,000 gallons of water are required to generate one megawatt-hour at a nuclear power plant. For comparison, a gas combined-cycle plant will require half to a third of the water required at a nuclear plant.
• Water consumption for driving - - 6.3 gallons. For gasoline only - - roughly 10.50 gallons of water required per 100 miles of travel. For an ethanol vehicle - - the water consumption required is 400 times greater.
• Water consumption for heat - - 2.5 gallons. Natural gas for heating water during the month of September.

Total water consumption for a day for me is estimated at 3,438 gallons. Basically for shelter, food, drink, and travel - - a trip to Wal-Mart and a purchase of a pair of jeans would have tagged me with another 2,900 gallons. The jeans would have almost doubled my total consumption.

Negotiations Implementing Strategy - - Focus on Process

Consciously change the game by not reacting to the other side. Take steps to shape the negotiation process as well as the outcome.

Avoid

• Acting without gauging how your actions will be perceived and what the response will be.
• Ignoring the consequences of a given action for future as well as current negotiations.

Instead

• Talk not just about the issues but about the negotiation process: "We seem to be at an impasse; perhaps we should spend some more time exploring our respective objectives and constraints."
• Slow down the pace: "I'm not ready to agree, but I'd prefer not walk away either. I think this warrants further exploration."
• Issue warnings without making threats: "Unless you're willing to work with me toward a mutually acceptable outcome, I can't afford to spend more time negotiating."

Negotiations Implementing Strategy - - Build Trust First

Deal with relationship issues head-on. Make incremental commitments to encourage trust and cooperation.

Avoid

• Trying to "buy" a good relationship.
• Offering concessions to repair breaches of trust, whether actual or only perceived.

Instead

• Explore how a breakdown in trust may have ocurred and how to remedy it.
• Make concessions only if they are a legitimate way to compensate for losses owing to your nonperformance or broken commitments.
• Treat counterparts with respect, and act in ways that will command theirs.

Negotiations Implementing Strategy - - Elicit Genuine Buy-In

Use facts and the principles of fairness, rather than brute force, to persuade others. Arm them with ways to defend their decisions to their critics, and create useful precedents for future negotiations.

Avoid

• Threats: "You'll better agree, or else . . ."
• Arbitrariness: "I want it because I want it."
• Close-mindedness: "Under no circumstances will I agree to - - or even consider - - that proposal."

Instead

• Appeal to fairness: "What should we do?"
• Appeal to logic and legitimacy: "I think this makes sense, because . . ."
• Consider constituent perspectives: "How can each of us explain this agreement to colleagues?"

Negotiations Implementing Strategy - - Uncover and Collaborate

Learn the other party's motivations and concerns. Propose multiple solutions and invite your counterparts to improve on them.

Avoid

• Making open-ended offers: "What do you want?"
• Making unilateral offers: "I'd be willing to . . ."
• Simply agreeing to (or refusing) the other side's demands.

Instead

• Ask "Why is that important to you."
• Propose solutions for critique: "Here's a possibility - - what might be wrong with it?"

Negotiations Implementing Strategy - - Get the Big Picture

The cover story on the November 2010 issue of the Harvard Business Review covers leadership lessons from the military during combat and reconstruction operations in Iraq and Afghanistan. One story, Extreme Negotiations by Jeff Weiss, Aram Donigian, and Jonathan Hughes, covers the lessons learned by U.S. soldiers in the art of managing high-risk, high-stakes situations. The article has a considerable amount of great information that I will cover over a five day period.

The article focuses on the five highly effective strategies of (1) understand the big picture, (2) uncover hidden agendas and collaborate with the other side, (3) get genuine buy-in, (4) build relationships that are based on trust rather than fear, and (5) pay attention to process as well as desired outcomes.

The first is "Get the Big Picture." The key starts with soliciting the other person's or group's point of view. Use what you learn to shape the objectives of the negotiations and determine how you'll achieve them. In getting the big picture, avoid the following:

• Assuming you have all the facts - - "Look, it's obvious that . . .'
• Assuming the other side is biased -- but you're not.
• Assuming the other side's motivation and intentions are obvious -- and probably nefarious.

Instead, focus on the following:

• Be curious: "Help me understand how you see the situation."
• Be humble: "What do I have wrong?"
• Be open-minded: "Is there another way to explain this?"