Energy boom benefits state as local economies diversify
Despite efforts to increase the state's economic diversity, energy continues to lead the state.
The energy boom has benefited all of Oklahoma, said Roy Williams, president and chief executive officer of the Greater Oklahoma City Chamber.
“The successful energy companies are very committed to the community,” he said. “They're significant contributors to nonprofits, the arts and to sports and recreational and cultural activities. ... They're huge supporters of our educational institutions because they draw from them for employees.”
State and city leaders worked hard for years to attract and grow companies from outside the energy sector to help protect the economy from another energy bust.
Despite the energy sector's continued dominance on Oklahoma Inc., Williams said the local economies are diverse.
“We have a much more diversified economy today than what we've ever had in our history,” Williams said. “Whether you look at the gross metropolitan product, employment or annual earnings, we now have a very vibrant and diverse economy, including aviation and aerospace, a large bioscience sector and a hospitality industry, which we haven't had before a decade ago.
“You don't want to build a community on one economy. You want diversification.”
Still, some in the oil industry say the sector's historic boom-bust cycle may be over. Harold Hamm, chairman and CEO of Oklahoma City-based Continental Resources Inc., said the state and city should continue to diversify their economies, but that there is little risk of an oil bust anytime soon.
“The boom-bust cycles of the past historically have been because you have had such a small petroleum demand,” Hamm said. “Back in the '20s, there were not a whole lot of cars. It didn't take much to glut the market.
“Today, that's changed. We have 90 million barrels per day of demand shared across the world. It's not easy to glut that.”
Others, however, are not so certain.
“No industry is immune from a bust, particularly one with such a consistent history of them,” said Jake Dollarhide, CEO of Longbow Asset Management Co. in Tulsa. “We're experiencing a miniboom in oil now because of alternative drilling technologies. But it's expensive, and it's not as profitable as many companies hoped.
“Hopefully the next bust doesn't happen for 10 or 20 years down the line, but there will be another bust.”
Adam Wilmoth, Energy Editor