Oklahoma soon will be third in the nation among oil-producing states, an economist predicted during Enid Regional Development Alliance’s quarterly luncheon Thursday.
Mark Snead, president and economist at RegionTrack, spoke about the economic role of oil and gas in Oklahoma currently and in the future.
“We are looking for record production level, in terms of crude oil … sometime in the next six months,” he said. “All-time production highs in Oklahoma. We aren’t really looking for substantial gains in natural gas. In fact, we’re probably assuming flat production to maybe slightly upward production for many years. It’s just an overwhelming supply issue.”
Of the top producing oil states, Oklahoma now is fifth.
“We’re probably going to be third pretty soon because Alaska and California both are steadily diminishing,” Snead said. “Once Oklahoma gets ramped up again, and we start drilling aggressively for crude, you’re likely going to see us pass both California and Alaska.”
On the natural gas side, Oklahoma is third in production but is way behind Pennsylvania and Texas.
“In fact, Pennsylvania’s probably going to pass Texas sometime in the next 12 to 18 months, we would argue,” he said.
“It’s remarkable where we stand now among top producing states,” Snead said.
Drilling rigs peaked similarly in both 2012 and 2014, he said.
“The collapse, it was ugly. The spillover affected all areas of the state. Here’s the rebound,” Snead said. “A couple of points I want to make for you is that, one: Yes, the rebound has been substantial. Two: No, we have no expectation, whatsoever, as you can tell from our forecast, that we’re headed back to 200 rigs. And third: We are slightly outpacing the nation in terms of rebound. We look a lot like Texas, but in third place is North Dakota. We are much stronger, in terms of rebound, than North Dakota.”
Mining employment has bounced back after essentially two years of layoffs, he said.
“We’ve had a really strong third quarter, and 2017 is going to turn out to be a pretty good year. We think 2018 is going to be a really solid year, in terms of total state job growth,” Snead said.
“We’re modeling four scenarios for crude oil prices,” he said. “We think the risk of divergence in oil prices, either up or down, is not particularly great at this time. In fact, we would consider this to be a pretty low-risk environment. And this is very optimistic for the industry, very positive for the industry, the fact that there could be some downside potential, but, by and large, it’s a pretty narrow expected price forecast.”
The rebound of the industry is real, substantial, is over an extended period of time and has had a broad reach across the state as a whole, he said.
As the oil and gas industry went into contraction, the state as a whole went into contraction, Snead said.
“Many people believe Oklahoma has outgrown the oil and gas industry, and it is far from the truth, it really is,” he said.
Story provided by: Enid News and Eagle
Written by: Jessica Miller
