Strait talk: State energy sector enjoys ‘virtual boom’

Iran has threatened to close the Strait of Hormuz, disrupting the flow of oil to the West. In Oklahoma, the only dire strait in the energy industry is finding enough office space to contain ever-expanding exploration firms.

What a long way we’ve come since the Arab oil embargo of the 1970s, which forever altered the price of fuel. An energy boom in Oklahoma followed that period; the boom in turn was followed by a major bust.

A slow recovery ensued, along with a shift from oil to natural gas. Modest-sized independents such as Chesapeake and Devon grew into giants. They’re now joined in Oklahoma City by Continental Resources and Sandridge.

Of course these companies don’t confine their activities to Oklahoma, but the next incubating energy giant just might. The state seems to have plenty of gas — and oil — still in reserve.

“It’s a virtual boom going on in Oklahoma,” Domestic Energy Producers Alliance President Mike Cantrell told The Oklahoman last week. This is a rare time in which the industry is booming (despite suppressed natural gas prices) at the same time that consumers are enjoying low gasoline prices. This can’t last.

What happens in Tehran doesn’t stay in Tehran. If Iran does disrupt the movement of Mideast oil, the price of crude and gasoline will rise.

Oklahoma’s energy sector learned from the last bust, which resulted not only in the failure of many Oklahoma banks but also the passage of MAPS. This followed years of decline in Oklahoma City’s fortunes from a depressed energy sector and failed attempts to diversify the economy.

MAPS began the revitalization of downtown, making it more attractive for companies like Devon to stay and expand there and for Sandridge and Continental to locate there.

Tehran is probably just blowing smoke. Meantime, Oklahoma’s energy sector is smokin’ hot.