Hello from Rich Tabaka, Founder and President of Allied Resource Partners. I and my core management team recently returned from a great Fourth of July Week outing, and I hope yours was as enjoyable. And the Fourth of July always makes me thankful for living in America, reminding me that “We the People” are responsible for what goes on in Washington, DC.
I started Allied Resource Partners to make money for my Partners – present and future –
and myself by using my new approach that’s leading the way for doing business in O&G with partners like you. We treat our partners, our people, our industry support, and the environment with dignity and respect. We do smart planning and implementation, which requires our knowing “which way the wind blows,” a phrase first recorded in John Heywood’s proverb collection of 1546.
I’m borrowing the phrase for this article because we must know its direction in our nation’s capital if we want to plan and implement effectively. And as I often state, Allied Resource Partners makes no claims about having foolproof insight into current events, but track as best we can so we can keep our business on track.
We just finished reading recently published “Chaos Under Heaven,” written by Josh Rogan. It chronicles the “battle for the 21st Century” currently between the United States and China. It provides the background, details about mistakes made by presidents Donald Trump and Barrack Obama (on America’s side) and Deng Xiaoping and Xi Jenping (on China’s), and summarizes what the future might hold. Here’s a useful bullet-point summary.
- When the Cold War ended with the collapse of the Soviet Union in 1989, America was the only World Superpower. The Western World, led by the United States, knew from the lessons taught by history that China would eventually rise to challenge America (a confrontation known in ancient Greece as the Thucydides Trap).
- The United States wanted to avoid another Cold War, so it followed a diplomatic strategy that would assist China’s joining the modern world by integrating it into the world sociopolitical economy and expecting it to become more democratic when it reaped the benefits of cooperation rather than confrontation.
- The strategy worked well for about the first ten years, but three worldwide tectonic trends weakened it: Globalization and Outsourcing caused by an increasingly networked world; the Rise of Populism and Nationalism due to increasing inequality; accelerating technological advances in Artificial Intelligence and DNA/Biotechnology. All this frayed the world order, which at that time was built on a one-superpower perspective.
- For the last ten years or so, leaders of both sides followed their own beliefs about the other: America failed to realize that China has no intention of becoming a Democracy. It will do all it can to regain its centuries-ago superpower status on the world stage by using every weapon in its growing arsenal to demonstrate why Socialism is superior. And China failed to realize that America and its Democratic allies will not sit idly by while China creates a New World Order.
- The bad outcomes events that have transpired in the last five or so years can be blamed on world leaders, who have pushed unilaterally for what they want rather than seeking a better-negotiated compromise. The book’s chapters describe this, topic by topic. We won’t do a chapter-by-chapter summary, but please read them if you want more details.
The book’s epilogue offers these takeaways:
- The World is now in the beginning stages of a new Cold War. It will last for at least a generation (25 years). Neither side wants actual war, so it will likely stay in Cyberspace and the Marketplace.
- Given the current climate (Domestic and International) either Biden or Trump would do about the same going forward because they have to appease multiple constituencies.
- There are hardliner and appeaser factions on both sides. The pendulum will always keep swinging between them.
- Whether you voted for or against Trump, sociopolitical experts now say he served a useful purpose by calling attention to and reversing the Obama Administration’s overgenerous appeasement.
- Businesses on both sides will do whatever’s necessary to keep customers. They aren’t tied to Political Idealism, but rather to Capitalism and Profit.
- Covid-19 has been the lightning rod drawing attention to the “China Question” most nations have known about but have avoided. Raw Materials and Supply Chain issues certainly come to mind.
- There’s no telling what the endgame will be, but the United States and its allies should: shore up/improve democratic institutions, improve National and Cyberspace and Health/Viral Security, reduce Income Inequality and Environmental Degradation and Partisan Politics, grow the World Economy.
- Expect both sides to promote their Foundation Values. For America: Democracy, Rule of Law, Human Rights, Freedom of Speech, Religion, Thought, Lifestyle Orientation. For China: Socialism, Authoritarianism, Surveillance, Group Importance rather than the Individual.
- Both sides want to show that their values are better. AND THAT IS THE EXISTENTIAL BATTLE BEING FOUGHT FOR THE HEARTS AND MINDS OF PEOPLE AROUND THE WORLD.
Let’s make the above relevant for Allied Resource Partners. China’s growth plans are fueled by Oil and Gas. Demand will always cycle, but the trend is upward, and given increasing uncertainty in foreign supply, domestic production looks better and better for us. That’s why we continue to say: There’s money to be made going forward for Allied Resource Partners. And we are confident that all the above jibes with “staying the course” on our current strategy. We continue acquiring attractive leases while drilling and operating low-risk and high-return wells.
We post articles like this because we want you to be well informed. The more you know about current events and the connection to O&G, the more you’ll understand why we can say that Allied is leading the way by treating smart, accredited O&G investors the way today’s business climate demands. Please contact us if you would like to learn more about our latest Joint Venture.
PS: Here’s an incentive to buy in to our next project. I have two songs in mind that mention “which way the wind blows.” If you buy-in AND tell me just one of their names, I will send you “Thank You” gift. And I’ll guarantee that you’ll like it!
President, Allied Resource Partners