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>> LIVE, LOCAL, LATEBREAKING.
THIS IS KOCO 5 NEWS IN THE
MORNING WITH ERIELLE RESHEF,
ABIGAIL OGLE, AND METEOROLOGIST
BRAD SOWDER.
>> IT'S NOT HORRIBLE, BUT IT
COULD GET UGLIER IF THOSE PRICES
GET DOWN TO $60 A BARREL OR
BELOW $60 A BARREL.
I THINK THAT'S MORE OF A
CONCERN.
ERIELLE: THIS WEEK THE PRICE OF
HIGH.
OVERNIGHT, THEY REACHED INTO THE
$45-A-BARREL RANGE.
THIS IS A HUGE SPIKE FROM WHAT
WE SAW AT THE BEGINNING OF THE
YEAR
OVER THE PAST TWO YEARS,
PLUNGING OIL COSTS SENDING
ECONOMY.
THIS MORNING STEVE AGEE,
ECONOMIST AND DEAN OF THE OCU
SCHOOL OF BUSINESS, JOINS US
LIVE
WE'RE TALKING ABOUT THE FUTURE
OF THE OKLAHOMA OIL AND GAS
INDUSTRY.
US.
>> THE SOUNDBITE WE JUST HEARD
WAS FROM OUR INTERVIEW WITH Y
IN 2014 WARNING THAT OKLAHOM
COMPANIES WOULD SUFFER IF OIL
DIPPED BELOW $60 A BARREL.
HERE WE ARE ABOUT $45.
SHOULDN'T WE HAVE PREDICTED THE
DOWNSLIDE?
STEVE: SOMETIMES IT IS HARD TO
FORECAST THE SEVERITY OF THE
DROPS.
WE SAW THOSE PRICES FALLING AND
THE RAMP UP OF OIL
PRODUCTION
IN THE LAST FIVE OR SIX YEARS.
WE SHOULD HAVE HAD SOME
FOREWARNING.
BACK IN 2014, WE TALKED ABOUT
THAT FACT.
>> WE SEE THE STATE
FACING A
BUDGET SHORTFALL AND A LOT HAS
BEEN CONTRIBUTED TO THE OIL AND
GAS PLUMMETING.
SPIKE IS
SOMETHING WE CAN RELY ON?
BRIGHTER TIMES TO COME.
FROM THE DAY IN THE LAST TWO
WEEKS, IT LOOKS LIKE THE REST OF
THIS YEAR WILL BE FAIRLY STABLE.
I EXPECT PRICES TO STAY IN THE
50-RANGE.
FAIRLY EQUAL.
WE'RE TALKING ABOUT 96 MILLION
WORLD.
YOU WILL SEE A WRAP UP WITH OIL
PRICES.
>> TWO YEARS AGO PRICES WERE
OVER THE $100 MARK.
WHAT CAUSED THE IMMEDIATE
DROP-OFF?
SO GOOD AT WHAT THEY DO.
THEY JUST RAMPED UP THE
PRODUCTION.
OIL.
WE WENT OVER 9 MILLION BARRELS A
DAY.
DRIVES PRICES DOWN.
WE HAD THE DECLINE IN THE
OVERALL ECONOMY.
WE HAVE HAD LANGUISHING DEMAND
WORLDWIDE.
A COMBINATIO OF DEMAND AND THE
RAMP UP WITH SUPPLY.
OIL COMPANIES DEALING WITH
ACROSS OUR STATE.
GENERA
INJECTION
WELL LIONS.
HOW DETRIMENTAL IS THAT?
STEVE: IF YO PRODUCE FROM ROCK
A LOT O WATER, WE'RE TALKING
ABOUT SALTWATER, AND THEY HAVE
TO DISPOSE OF THE SALT WATER.
NORMALLY WHAT IT IS BASE
ARE HOW YOU DO THAT.
THE CORPORATION COMMISSION HAS A
REAL TASK TO TRY TO DEAL WITH
THE ISSUES AND NOT PRECLUDING
THOSE OIL COMPANIES FROM
DISPOSING OF WATER TO PRODUCE
THE OIL TO KEEP THEIR COMPANIES
OPERATIONAL.
>> OTHER CITIES ARE FINDING WAYS
TO RECYCLE THAT WATER.
WHY CAN'T OKLAHOMA DO THAT?
STEVE: I THINK THEY ARE
SEARCHING FOR THOSE WAYS.
I THINK THE COMMISSIONERS ARE
DOING A WONDERFUL JOB DEALING
WITH INDUSTRY AND ENVIRONMENTAL
CONDITIONS.
WE KNOW
THAT 12% TO 15% OF ALL
STATE REVENUE IS GENERATED BY
OIL AND GAS.
CONSIDER HOW BIG THE INDUSTRY
IS.
IS THERE A WAY FOR OUR STATE TO
DIVERSIFY?
IS IT EVEN REALISTIC?
STEVE: THAT IS A GREAT QUESTION.
WHEN YOU GO BACK TO THE 1980'S,
WE HAD THE OIL BUST.
THE STATE WAS ABOUT 28% RELIANT
INDUSTRY AS A
REVENUES.
20% DOWN TO ABOUT 12% NOW.
NUMBERS.
1980'S.
ADDITIONAL DIVERSIFICATION IS
NEVER BAD.
IT IS ALWAYS GOOD TO READ THE
RISK IN CASE ONE INDUSTRY TURNS
DOWN.
AND IT
WILL CONTINUE. TO DO SO
80% O
OUR CONSUMPTION COMES
FROM HYDROCARBONS.
IT WILL COME FROM HYDROCARBONS.
>> WHAT DO YOU MEAN BY THAT?
STEVE: WE CONSUME OIL, NATURAL
GAS, AND COAL.
GAS ARE THE
DOMINANT FUELS AROUND THE WORLD
NOW.
THERE IS A LOT OF PUSH TO
RENEWABLES.
THEY ARE STILL SMALL COMPONENTS