What about oil’s future?
The recovering oil and natural gas industry is helping to fuel growth throughout the state economy, but the industry’s longer-term future is still unclear, state economists say.
The recovering oil and natural
gas industry is helping to fuel growth throughout the state economy, but the industry’s longerterm future is still unclear, state economists said this week.
“I’m very optimistic about the price of energy,” said Robert Dauffenbach, director of the University of Oklahoma’s Center for Economic and Management Research. “We broke through
$ 55 a barrel on WTI ( domestic benchmark West Texas Intermediate) crude. We’ve had a couple of bad days, but maybe that will be the new underlying support.”
Speaking Wednesday at the Greater Oklahoma City Chamber’s State of the Economy presentation, Dauffenbach said U. S. oil and refined product exports both are increasing rapidly.
“We’re looking at a very positive trend,” he said. “You can look for that for underpinning the price of energy.”
Global oil markets have been depressed over the past three years as shale oil doubled U. S. oil production in less than a decade.
“I think we have at least one more surge,” Dauffenbach said. “We’ve had 50 years of up and downs. We’ve seen just since last summer a 35 percent increase in price. As the world economy grows, we will need more oil.
“When we get out 20 or 30 years, we might see electric cars and renewals having more impact, but I still think we have one big positive cycle ahead of us that will occur in my lifetime, which means quite soon.”
Not everyone is convinced.
While another oil boom is possible, University of Central Oklahoma economist Mickey Hepner said state leaders need to plan now for a time when they can no longer rely as heavily on the oil and natural gas industry.
“I agree the upside potential is greater than the downside risk over the next 12 to 18 months,” he said. “But long term, this is something we have to grapple with as a state. There will be a last oil boom. I don’t know when it will be. Maybe it’s the next one or the one after that. Some people are saying it’s the one we already had.”
Changing technology and global trends could significantly alter the oil and natural gas market, Hepner said.
“Demand is growing for energy, but that doesn’t mean we’re going to always have a boom and bust cycle for oil prices going forward,” he said. “There was a time when people foresaw coal would last hundreds of years. But we’re seeing coal mining as an industry as negligible today.”