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The Known and the Unknown

August 27, 2021

In a world of economic trends and number-driven analysis, how can your business prepare for the unknowns? Catch our newest TrendsTalk episode with ITR President Alan Beaulieu to learn more.



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Transcript by Rev

Hi, I'm Alan Beaulieu from ITR Economics, I think a lot of you know that. I really enjoy these times when we can talk or I can talk to you, and hopefully you can email me back with any questions or comments. You can do that at It'll be sure to get to me. I want to talk to today about the known and the unknown. Here at ITR, we specialize in the known, obviously, but I know you deal in both. I know that for a fact.

I was just at this wonderful summit, a fantastic summit, one of my favorite places to go, and the folks there are dealing with transformational subjects that I can't give them the answers to. Like, how long will we be using electricity or EAFs, electric arc furnaces, for instance, to make steel? Or blast oven furnaces to make steel? When are we going to switch to hydrogen as the power source? What are we going to do about the pollution that comes out of blast oven furnaces when they produce more CO2 emissions than they do steel? For every ton of steel a ton and half of carbon dioxide emissions.

Of course, understand that's not all of it. Do not paint with that broad brush. Those aren't all the ones that's only some of them, and a lot of that's offshore. So let's just not go after the steel folks. They're good folks.

But they're facing all kinds of change. And hydrogen is not an easy answer. I don't know if you've looked into that or not, but you just can't say, oh, we're going to go to hydrogen to make steel, we'll go to hydrogen for our cars, we'll go to hydrogen for heating our homes, because have you looked into what it takes to get emissions free hydrogen?

It's not something that you can just do. You just don't zap a little water and you have oxygen and hydrogen, it just doesn't work that way. And the process that's used now creates gray hydrogen. Gray hydrogen uses natural gas and the argument is it can be sent through the same pipelines. And that's where stuff like gray hydrogen has its issues too in that the emissions needed to create that gray hydrogen are more than the emissions that come from say diesel fuel. And the cost is greater than say diesel fuel. So you have some real issues to go through.

And I can't tell you the timeline. I know we're on that path. I know that we'll figure it out because I have a lot of confidence that mankind overcomes and we have dramatic things in the past, and in the recent past, and we're going to continue to do so.

So you leaders out there that are facing the unknown, you have my sympathy and my admiration. But there are some things you can know. And as I addressed business leaders, and as all of us address business leaders from a stage or from webinar delivering executive vantage points there are things that we can know. And it's based upon rates-of-change, it's based on leading indicators. And those things have no emotional content. They have no, but if's. They have no well maybes. They are either signaling one thing or they're not. They're signaling what phase you're going to be in, in a certain timeframe, and you can adjust that. You can know whether it's going to happen.

So are you going to face a really long 2022? Depends on who you are. Depends on the industry that you're in. But you can know. I can't tell you the answer of hydrogen when that's going to become, if that's going to become a viable source, when will it replace the lithium battery, which has a whole host of issues? When are we going to see all that? But I can tell you that you can know what your business is going to do in 2022 and a whole host leading indicators tell us that the economy is going to continue to grow here and overseas in 22, but at a decelerating pace.

The leading indicators are unequivocal. So all you need to do now is find out how does your rate of chain relate to the macroeconomic world and how does it relate to those all important leading indicators? Then you can plan with confidence because you can know.

Thank you for joining me today. I greatly appreciate it. Alan, ITR Economics. And I hope you have a great day.


Since 1948, we have provided business leaders with economic information, insight, analysis, and strategy. ITR Economics is the oldest privately held, continuously operating economic research and consulting firm in the US. With a knowledge base that spans six decades, we have an uncommon understanding of long-term economic trends as well as best practices ahead of changing market conditions. Our reputation is built on accurate, independent, and objective analysis.