Like most businesses, SandRidge Energy once faced a tipping point that required us to change course. While it wasn't easy, we found the courage to confront the facts, admit we were wrong and make the necessary adjustments to persevere.
In state government, the prison system is at its own tipping point. On the surface, it could be argued that Oklahoma's incarcerate-at-all-costs strategy works, given that prisons routinely operate near capacity due to our having one of the nation's highest incarceration rates. However, deeper analysis shows this strategy is unsustainable and doesn't actually increase public safety, given that Oklahoma's crime rates aren't decreasing despite a 30 percent increase in prison spending since 2000. Clearly, it's time for Oklahoma to change course.
Such was the case at SandRidge four years ago, when we made a strategic decision to change course as a company. Since 2006, SandRidge had been focused on developing natural gas reserves under a strategy that assumed natural gas prices would remain at parity with oil. However, the market showed otherwise; natural gas prices were at a tipping point in 2008, and so was SandRidge.
Indeed, by 2012 prices had fallen to just above levels not seen since 2001 while oil prices rebounded to near 2008 highs. At the same time SandRidge changed course from the domestic-only commodity of natural gas to the global commodity of oil. We became a stronger company than ever.
State government is considering a similar fact-based change of course with House Bill 3052, by House Speaker Kris Steele and Senate President Pro Tem Brian Bingman. HB 3052 presents a realistic, long-term solution to Oklahoma's crime and prison problems by focusing more on crime prevention, offender treatment and offender reintegration. These are the commodities that the facts show will improve public safety, just as oil was the commodity the facts showed would improve SandRidge.