Written by Dick Pryor on Monday May 9, 2011
Crude oil futures and gasoline prices are soaring and it's not even summer. While higher prices in the oil patch are good for many in Oklahoma, the ripple effect that rising prices has on individuals cannot be ignored. Oil and gas producers and royalty owners see a benefit, but even for them that benefit is offset by the increased price for goods and services. How high will the prices go? How long will they last? How do higher prices affect the economy? These are just some of the questions posed to our guests this week on Oklahoma Forum - Corporation Commissioner Bob Anthony, Oklahoma City University Economics Professor David May, and the senior writer for Devon Energy Corporation, Tony Thornton.
While rising prices encourages more drilling and the higher state gross production taxes that comes with it, there is some concern that at some point, consumers will cut back on their driving and a gasoline glut will begin to drive prices down. Oklahoma's economy is in better shape than many states, but without reliable and widespread public transportation, most employees drive to work, and the high gasoline prices are taking a bite out of their paychecks. Nationally, the cost of a gallon of regular unleaded is heading toward $4.00 per gallon.
As often happens when energy prices skyrocket, there are renewed calls for the exploration of renewable non-fossil fuel. Still, the most attractive "new" energy source is natural gas. Boone Pickens and other Oklahoma energy leaders are pushing increased reliance on natural gas. Bob Anthony addressed the concerns about hydraulic fracturing or "fracking" as a method of releasing natural gas from shale. Despite efforts in other states to limit "fracking" pending further environmental study, Anthony maintained that "fracking" is a safe way to tap into America's plentiful supply of natural gas.
For more information on alternative energy and hydraulic fracturing, I recommend a couple of websites. One for the Pickens Plan, and the other for a site dedicated to explaining hydraulic fracturing. The Environmental Protection Agency also has information about hydraulic fracturing. There's also a new website in the fracking "library," called FracFocus.
Pennsylvania officials maintain that the chemical-infused water used in fracking is safe; in fact, Pennsylvania allows treated water to be released into streams. However, an EPA study is pending, and with 60-80% of wells in the next ten years expected to require fracking, the results of that study could have a major impact on the industry.
We don't have any answers about the high price of gasoline, but this week's program will give you a good idea of the conversations currently going on about energy production and policy.
Until next time,
(Pictured above, left to right: Host Dick Pryor, Bob Anthony, Tony Thornton and David May)
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