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.
Oklahoma is poised to make tremendous gains in public safety under this bill, which bodes well for continued economic growth, given that businesses consider safety when deciding where to operate and invest. With all the other pro-growth policies the state has enacted, increasing public safety would be yet another tool we can use to grow the economy.
By reducing crime, the bill would slow prison growth in the next decade from a projected 9 percent under current policies to a more manageable 2 percent. The bill would also do more to deter former inmates from offending again so more Oklahomans can be in the workforce contributing to the economy rather than in prison consuming state resources. Contrary to popular belief, many businesses are willing to hire former inmates once they pay their dues.
SandRidge trains former inmates to work at our company because we know that having a job changes their course, restores their dignity and helps break the endless, generational cycle of incarceration. By making a positive course correction under HB 3052, Oklahoma's safety and economy will benefit tremendously.
Ward is chairman and CEO of SandRidge Energy.