POSTED ON OCTOBER 24, 2007:
Born and raised on black gold, to Okies, "boo" is the well run dry
Let's play make-believe for a few minutes.
Imagine turning on the television tomorrow to see a live international news conference at which a brand-spanking-newly invented cold fusion-powered car is unveiled before the world.
It turns out, a heretofore unknown super genius (let's call him "Gus," from Buffalo, NY) has been tinkering around with it in his mom's basement for years, and he finally figured out and perfected a method of cold fusion that cleanly-burns plastic milk cartons, cigarette butts, Twinkies wrappers, those soft drink can-holder-thingies that choke seagulls and baby seals, old New Kids on the Block CDs, unused household chemicals, used cat litter, junk mail, and anything else we just don't want around and don't want piling up in a landfill somewhere.
That, and Gus has found a way to easily adapt it to automobiles of all types and sizes, rendering gasoline useless overnight.
It's also adaptable for household heating uses, or any other energy application, rendering natural gas, coal or any other fossil fuel source useless.
And let's not forget the nifty, non-toxic solid byproduct it creates as exhaust, which is useful for making plastics, asphalt and everything else heretofore dependent on petroleum for production.
The world would rejoice because Gus's new invention would solve a lot of problems.
Energy supplies would be limitless!
No more dependence on foreign oil for America!
Gas prices wouldn't go down--they'd go away!
World peace would ensue because nobody would fight over oil and no longer have any pretext for nuclear programs (we're still playing make-believe, remember...).
The global warming debate would be moot, so Al Gore would segue way into a career where his true talents lie: hosting a late-night talk show, with Jim Inhofe as his quippy co-host (as long as we're playing make-believe...).
No need for twice-weekly curbside trash pick-up anymore, or for heating and electric service, because tossing refuse into the household Gus-O-Nator kills all those birds with one stone.
And speaking of killing birds--that would generally only happen in the proverbial sense because there'd be no more pollution-induced seagull deaths, thanks to Gus and this, the greatest invention of the 21st century.
Now a super-multigazillionaire, Gus can finally move out of his mom's basement, and likely even snag himself a supermodel girlfriend, having ousted Bill Gates, the Walton clan, and the Google guys as the world's richest.
A global golden age would ensue.
Since Gus is from the Niagara Frontier, naturally his corporate HQ overlooks Lake Eire and immediately, all the Sun Belters and Silocon Valley boys and girls migrate back east as the desert creeps inexorably larger and drier.
If we can entertain the notion, however unlikely, of a cheap, clean, renewable and universally adaptable energy source suddenly arriving on the market, what would follow doesn't require nearly the same suspension of disbelief to envision.
While the rest of the world gets on with its utopia, Oklahoma's fortunes would take a sharp turn in the opposite direction.
"I'd be toast," Dewey Bartlett, Jr., president and third-generation owner of Keener Oil and Gas, told UTW.
"Companies like mine would go out of business," he said.
And with them, the heart of the state's economy.
Since the finding, selling, transporting and processing of fossil fuels is the axis on which Oklahoma's economy turns, if that resource suddenly went the way of the dinosaur, rather than a new golden era, the Sooner State would much more resemble the land inhabited by Mad Max and the rest of the "Thunderdome"-misfits (except the wasteland mutants would maraud for other treasure than "guzzleen" since, of course, it would be worthless).
With the speed of global warming, the desert would once again begin encroaching upon the state.
"It would devastate Oklahoma. I don't know that the state could survive," said Mike Terry, president of the Oklahoma Independent Petroleum Association and former executive director of the Oklahoma Energy Resources Board.
"You don't have to look much farther than the early '80s" to know what would happen if demand for fossil fuels suddenly became extinct, said Mickey Thompson, a consultant for the OERB, former president of the OIPA and former CEO of Diamondback Energy Services.
Recalling the Oil Bust of the early 1980s, he said, "Oil prices plunged and, almost overnight, people were laid off, banks struggled, real estate values dipped anywhere from 20 to 40 percent, depending on where you lived . . . "
Prior to the Oil Bust, Thompson recalled that one dollar out of every three filling state coffers was revenue directly from oil and gas, with the second dollar coming indirectly--a full two-thirds of the state budget came from the industry.
Today, though, one out of about every eight dollars filling state coffers comes directly from oil and gas, according to Mark Hendrix, tax policy analyst for the Oklahoma Tax Commission.
Those dollars, of course, would go away if the market suddenly disappeared for oil and gas.
"We're somewhat less dependent now on the oil and gas industry, but we're still extremely dependent," said Thompson.
"It would be less catastrophic, but still significantly catastrophic," he added.
As Terry sees it, though, that catastrophe would be total.
"The government would collapse," he predicted.
"Schools would shut down, there'd be no law enforcement or social services," he said.
"It would have a huge detriment on state government," concurred Bartlett.
Likewise, unemployment would skyrocket in the state.
John Carpenter, public information officer for the Employment Security Commission of Oklahoma, said 47,500 of the state's jobs are in the oil and gas industry, 6,600 of which are in the Tulsa metro area.
But people who work directly in oil and gas wouldn't be the only ones affected.
"There's a café in Atoka, and all of its customers work in the oil fields," said Thompson.
Restaurants like that, as well as convenience stores, grocery stores and numerous other peripheral businesses that live on the patronage of oil field workers would die sudden deaths, he explained, if the oil and gas industry evaporated overnight.
"I don't think it's an overstatement to say there'd be a mass exodus out of Oklahoma--hundreds of thousands of people and tens of thousands of families. It would be a lot like the Dust Bowl of the 1930s in terms of the outward migration," Thompson foretold.
Such a scenario might be all too easy to dismiss, though, since the starting premise seems like the stuff of so much science fiction.
But it's not that far off, depending on whom you ask.
The heir of the Bartlett oil dynasty guesses that fossil fuels will be the primary energy source on this planet only for another 30 to 50 years.
However, that transition to alternative fuels will happen gradually, he expects.
For instance, the beginnings of that transition can be seen at the Murphy gas stations in the Tulsa area, which just recently began selling ethanol-blended gasoline.
But there's still a long, long way to go, since that blend, which is the most common, is still 90 percent gasoline.
"It could happen sooner than I'm anticipating, though," Bartlett qualified.
For instance, he conceded, some innovator like Gus might just make a breakthrough in the next few years.
Also, just last week, a grassroots umbrella organization and national environmental think tank--the Civil Society Institute, released the findings of an opinion poll that, according to them, calls for an end to fossil fuel dependence.
"Americans may be addicted to coal, gasoline and other fossil fuels today, but a new national opinion survey makes it clear that the public is ready to go 'cold turkey' and put an end to its costly and environmentally-harmful dependence on fossil fuels," said Pam Solo, president and founder of the Civil Society Institute.
Either way, the coin by which Oklahoma has always paid its way in the world won't always be worth what it is now, or even stay in circulation, according to Bartlett.
"This change is going to occur," he assured.
And when it does, if present conditions remain, the rug upon which the state economy stands will be pulled out from underneath it.
"We need to be prepared, but 99.9 percent of the population hasn't given it two seconds worth of thought," Bartlett said.
And what little thought is given to the subject is driven by environmental fears, he said.
"When you take effects from greenhouse gases out of the discussion, there are only three or four people left standing. But whether we're causing climate change or not, that shouldn't be the only impetus for transitioning to a new, consistent and affordable form of energy," he said.
Instead of letting some "Gus" beat us to it, Bartlett said the Sooner State, and Tulsa in particular, is ideally positioned to make that transition and once again become the world leader in the energy industry by using its existing know-how to branch out more into biofuel, wind, solar, hydroelectric and other alternative energy sources.
"Tulsa could be the center of the universe when it comes to alternative energy," he said.
With the existing groundwork from Tulsa's history as the "Oil Capital of the World," he said the human capital and business infrastructure could easily be adapted for alternative fuels.
"The concepts that have been ingrained in Tulsa's business community are that they understand the concept of risk, and that's been in place since the discovery of the first oil well when this town started," Bartlett elaborated.
He also said, "Anybody with an engineering degree could segue way into alternative forms of energy," as well as Tulsa itself, with its "wealth of technical information" and oil industry-tailored educational institutions.
"Why doesn't Tulsa make a concerted effort to make itself the educational capital of the world when it comes to alternative energy? Nobody else is doing it to any great degree," Bartlett added.
That concerted effort might be lacking because few, if any, share Bartlett's sense of urgency.
"I don't disagree with my friend Dewey's premise that there's an energy mindset that exists here that doesn't exist elsewhere--And why wouldn't we use that human infrastructure to make that transition?--but his timing is way off," said Thompson.
He predicts that fossil fuels will remain the dominant source of energy on the planet for at least another 100 years.
"Dewey's figure creates a sense of urgency, though, and if you don't create a sense of urgency, people won't do anything. Most people don't care about what's going to happen a year from now, much less 50 years from now," Thompson added.
Terry expects to stay in business for even longer.
"That transition might happen over hundreds of years. Fossil fuels are too big. There's no replacement that can ever take over," he said.
"Even if the science was there (for a replacement fuel), the infrastructure would take years and years and years to catch up," Terry added.
So, does Bartlett's prediction put him in the minority within the energy industry?
"I wouldn't say that," answered Terry.
"If you talk to ten different people about that, you'd probably get ten different answers," he said.
The Nightmare on Main Street
There are a few key phrases that come to mind when someone thinks of Oklahoma's rich, varied and sometimes tragic history.
"Trail of Tears."
"Carrie Underwood is the new American Idol."
"Oil Bust" is another, but its occurrence is still so recent and its effects so broad--many of which are still being felt on the fringes of the state's economic pond where the ripples are still reverberating--that the phrase lacks easy and precise definition.
Matt Skinner, spokesman for the Oklahoma Corporation Commission, said there are two different schools of thought among historians, economists and energy industry gurus about what actually constituted the "Oil Bust."
The first is that the Bust's beginning can be charted from the collapse of the Penn Square Bank in Oklahoma City, or shortly thereafter, and it perpetuated until the energy industry's resurgence in the past few years.
Another school of thought is that there were actually two "busts": one in the mid-to-late '80s, which accompanied the Penn Square Bank closing, and another in the late '90s when the price of oil dropped below the cost of production after, among other contributing factors, Venezuelan President Hugo Chavez deliberately flooded the market in an effort to kill American oil production.
As the public information officer for the Corporation Commission, Skinner's professional responsibilities don't actually include him being an encyclopedic expert on all things oil industry-related, but he just so happened to have been a reporter during the time of the Oil Bust(s)--Clear Channel Communications' news operator for the region, which included Tulsa and Oklahoma City-- so he had a firsthand, up-close view of all that ensued.
He said the economic climate and mindset that led up to the Bust "was, in a word, insane."
The ongoing Oil Boom of the late 1970s attracted innumerable "fly-by-night" operators who wanted to get rich quick, he said.
Meanwhile, Skinner recounted, "Banks were loaning out money like crazy to anybody in oil and gas."
Those loans were to finance oil production and other business and real estate ventures.
"If you were an oil and gas guy, you could get money for anything," said Skinner.
Then, when Saudi Arabia increased production and drove down prices in 1982, "A lot of those fly-by-night oil operators who wanted to take advantage of the Oil Boom packed up and ran when the bust hit," he said.
When that happened, many of the banks called in the loans they'd so liberally dispensed, but the rivers of cash they'd expected to pay off those loans had disappeared.
Skinner described the events that followed as a "nightmare scenario."
While the dilettante drillers' side projects in real estate and other investments were going belly-up, so were the banks that were depending on the returns from those investments.
"The Penn Square building was going be huge and it was about finished. Then, when it fell, it started a ripple-effect: it almost took Citibank with it, and a bunch of other banks," Skinner recalled.
The word "almost" only accurately describes it because the federal government stepped in to prop up the teetering bank industry.
The crisis also demanded the intervention of the state government.
The Corporation Commission's responsibility was (and still is) to protect the state's natural resources, so it fell to them to plug up the wells that had been abandoned by the amateurs who tucked-tail and ran.
However, Skinner said, many of those wells were still productive, but would never be usable again if they were plugged, so the agency "worked with the Legislature in passing laws that helped stop the plugging of otherwise productive wells."
"They streamlined the rules without compromising their mandate to protect the environment, which allowed the wells to come back online when the prices went back up," he said, which helped the industry, and the economy it supported, to recover more quickly than it otherwise would have.
Also, the sudden financial drought from lost oil tax revenues spurred then-Gov. George Nigh to lead the creation of the "Rainy Day Fund"--the constitutional cash reserve fund for the state to fall back on if its source of income suddenly slows again to a trickle.
The possibility is pretty remote, though, of another catastrophe ensuing on the order of what was seen during the '80s Oil Bust, Skinner said.
"None of the same conditions exist today," he assured.
"We don't have the Boom-mentality, so we don't have the fly-by-night operators flooding the market. Also banks are a lot tighter with their money today," he explained.
"I'm not saying that a Bust can't happen, but you won't see quite the same catastrophe--the guys in the industry right now have been in business for a very long time--they're experienced operators and they know what they're doing, so they're not going to pack up and leave if things get tough," Skinner said.
As his case-in-point, the "Oil Bust" of the late 1990s saw cheaper oil than at the time of the Penn Square Bank collapse, but not nearly the same economic pandemonium--times were tough in the late '90s and early '00s, but they weren't catastrophic.
In 1999, when the price of oil was lower than the cost of production, the average price per barrel was $6.50, Skinner said, compared to the average $35 per barrel in 1982.
The highest it's ever been was last year, at an average per-barrel price of $64.54, he said.
last year, at an average per-barrel price of $64.54, he said.
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