Date post: | 15-Jan-2016 |
Category: |
Documents |
View: | 222 times |
Download: | 0 times |
The Oklahoma Energy E&P EconomyWho is John Galt?
Karr Ingham, Economist
Annual Meeting of the
Oklahoma Independent Petroleum Association
June 8, 2008
The Oklahoma Energy Index
A Partnership Presentation ofThe OIPA and Oklahoma Secretary
of Energy David Fleischaker
The Oklahoma Energy Index
Composite index, based at 100.0 in Jan 1995
Calculated using a comprehensive group of Oklahoma E&P indicators
Tracks growth rates, cycles and trends in Oklahoma energy E&P industry
OEI Components
Crude oil and natural gas prices paid to producers Rig count, intents to drill Volume and value of Oklahoma crude oil and
natural gas production Industry employment Energy E&P Stock Index
-
50.0
100.0
150.0
200.0
250.0
300.0
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
Ind
ex (
Base
=100 J
an
199
5)
Oklahoma Energy IndexApril 2008
249.1
March 1997 July 1999
Aug. 2001 Sept. 2002
“Gambling is illegal at Bushwood, sir – and I NEVER slice.” Judge Smails, Caddyshack - 1980
Monthly Average Crude Oil Price Paid to Oklahoma Producers 1995 - 2008
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
Pri
ce
/ b
bl
April 2008 $122.45
“Strikeouts are boring, and besides that, they’re fascist. Throw some ground balls. They’re more democratic.” Crash Davis, Bull Durham 1988
Daily Crude Oil Posted Prices April – June 2008
$80.00
$90.00
$100.00
$110.00
$120.00
$130.00
$140.00
Peak?
“Now go away, or I shall taunt you a second time!” French Castle Guard, Monty Python and the Holy Grail - 1975
Natural Gas Prices Paid to Oklahoma Producers, Monthly 1995 - 2008
$-
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$/m
mB
TU
“Fear? That’s the other guy’s problem.” Louis Winthorpe III, Trading Places, 1983
Monthly Value of Oklahoma Crude Oil & Natural Gas Production
$0.0
$200.0
$400.0
$600.0
$800.0
$1,000.0
$1,200.0
$1,400.0
$1,600.0
$1,800.0
$2,000.0
$ M
illi
on
s
“What hump?” Igor, Young Frankenstein - 1974
Oklahoma Monthly Rig Count
0
50
100
150
200
250
“I’m so rich, I wish I had a dime for every dime I have.” Arthur Bach, Arthur - 1981
Oklahoma Energy E&P Payroll Employment
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
“I AM serious. And don’t call me Shirley.” Dr. Rumack, Airplane - 1980
Oklahoma Energy Production Stock IndexChesapeake Energy, Devon Energy
Unit Corp., XTO Energy, Newfield Exploration, Apache Corp.,
St. Mary Land & Exploration, Quest Resource Corp.
846.2
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
1,000.0
19
95
19
97
19
99
20
01
20
03
20
05
20
07
IND
EX
(B
ase=
100
Jan
199
5)
April 2008
“There’s a man in the toilet selling after-shave. Now, what’s that all about?” Hank Gordon, Doc Hollywood - 1991
(Who IS John Galt?)
Oklahoma Total Employment andEnergy E&P Employment (April)
-
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Millio
ns
Total
O&G
“You’re KILLIN’ me, Smalls.” Hamilton Porter, The Sandlot - 1993
Oklahoma Energy E&P Employment as %of Total Employment 1995 - 2008
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%1
99
5
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
“Roses are red, violets are blue, I’m schizophrenic and so am I.” Bob Wiley, What About Bob? - 1991
Oklahoma Year-Over-Year Job Growth(April )Total Emp. and Oil & Gas Industry Emp.
11.9
36.0
27.2 27.3
2.7 3.2
5.94.1
6.3
37.7
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2004 2005 2006 2007 2008
Th
ou
sa
nd
s
“Baseball is like church. Many attend; few understand.” Leo Durocher
Oil & Gas Jobs Added as % of All JobsAdded Over Last Five Years in Oklahoma (April)
23%
8%
16%15%
23%
0%
5%
10%
15%
20%
25%
2004 2005 2006 2007 2008
“No soup for you!” The Soup Nazi, Seinfeld - 1995
Oklahoma Job Creation 2003-2008
140.1
22.2
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
Total O&G
Th
ou
sa
nd
s
“Seven years of college, down the drain.” John “Bluto” Blutarski, Animal House - 1978
Oklahoma’s Energy E&P Industry Drives Oklahoma Economy and Employment
• DIRECT energy E&P jobs added result in indirect job growth many times over
• Assuming an industry employment multiplier of 4.0, total job creation as a result of energy E&P activity in Oklahoma is over 88,000 jobs over last five years
• Direct and indirect employment as result of energy E&P activity in Oklahoma accounts for over 60% of all jobs created over last five years
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
$ M
illio
ns
Total
O&G
Oklahoma Total Economy andEnergy E&P Economy
“This is U.S. History. I see the globe right there.” Jeff Spicoli, Fast Times At Ridgemont High - 1982
Oklahoma Energy E&P Economy as % of Total Economy
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
“I spilled spot remover on my dog. Now he’s gone.” Steven Wright, Comedian
Gross Production Tax as Percent ofAll Oklahoma State Taxes Collected
(FY Ending June)
5%
7%
12%
7%
10%11%
13%
15%
12% *
0%
2%
4%
6%
8%
10%
12%
14%
16%
1999 2000 2001 2002 2003 2004 2005 2006 2007
Agnostic, Dyslexic Insomniac: Lays awake at night and wonders if there really is a dog.
All Taxes Paid by Energy E&P Industry as Percentof All State Tax Collected (Est., FY Ending June)
8.8%
12.3%
22.2%
12.6%
19.0%
21.5%
26.0%
30.0%
25.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
1999 2000 2001 2002 2003 2004 2005 2006 2007
“It’s about time, Benny. My clothes are goin’ outta style.” Michael ‘Squints’ Palledorous, The Sandlot - 1992
3 – 15 – 30Oklahoma’s Energy E&P Industry,
comprising 3%
of total employment, makes up
15% of the state’s economy, and pays
30% of all state taxes.
Who is John Galt?
Or, more appropriately,
Who is Ellis Wyatt?
John Galt
Central character and male heroin Ayn Rand’s 1957 classic novel
ATLAS SHRUGGED
Other ‘Atlas Shrugged’ Heroes
Dagny Taggart – Taggart Railroad
Hank Rearden – Rearden Steel
and, of course Ellis Wyatt – Wyatt Oil Company
The heroes are industrial giants and
economic contributors
The Looters and the Moochers
Politicians, bureaucrats, media, members of the ‘cultural elite’, and even others in industry who exist on the backs of the contributors, and engineer policies designed to punish the successes of the contributors and ‘equalize’ the economic landscape in the name of the ‘greater good’.
Original Title“The Strike”
One by one, the contributors remove themselves, their talents and their production from society and from the economy, to a secret community where they benefit from one another’s contributions, but the broader economy/society does not.
The Industry is Under Fire Politicians, consumers and the cultural elite
are indignant Entitlement mentality Apparent lack of understanding, much less
appreciation Ceaseless proposals to disrupt functioning
markets “BIG OIL” routinely hauled in front of Congress
to account for their purported unethical, perhaps even fraudulent activities and profits
Food Prices Are Increasing(due in part to Ethanol)
When will
“BIG CORN”
be called to account by Congress?
Housing Prices Increased Dramatically (that bubble is bursting)
When will
“BIG WOOD”
be asked to explain its contempt for the working people of America?
What If……..
…the talents, contributions (and production) of the nation’s energy producers were instantly removed from the marketplace?
…there was no gasoline at ANY price?…the switch is flipped, but the lights don’t
come on?…the things we take for granted are no longer
available to us?
And What If……..
… producing states were instantly denied the tax revenue provided by the industry?
(Strangely, only in energy is PRODUCTION taxed, in addition to consumption)
Sound Energy Policy
Ditch the taxes
GET OUT OF THE WAY
“There’s no crying in baseball!” Jimmy Dugan, A League of Their Own, 1992
The Oklahoma Energy E&P EconomyWho is John Galt?
Karr Ingham, Economist
Annual Meeting of the
Oklahoma Independent Petroleum Association
June 8, 2008
“…unless you’re a Rangers fan.” Karr Ingham, 2008