Outlook positive for cattle, oil, natural gas local news enidnews.com electricity billy elliot chords

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“If we do take prices a little bit lower it will squeeze those profits a little bit, but I still anticipate that most producers will have an opportunity for some profits. I don’t see any major impacts on the state in that respect,” Peel said.

Aside from that, Peel said the biggest threat to the industry, from an economic standpoint is external factors, such as if the country’s macro economy doesn’t do well, or if there’s negative changes in inflation rates. He said there’s also uncertainty currently with U.S. trade policy, and the renegotiation of trade agreements could potentially have an impact.

“For anybody’s operation, it would be input cost. Feed costs, fuel cost, land prices, leases … it all boils down in this business (that) your main deal is input cost. That’s just it in a nutshell. Your input is just what makes you and breaks you out here,” Shepherd said.

“Cattle production is the number one agriculture market in Oklahoma so it’s very very important. And we have all segments of the cattle industry in Oklahoma,” Peel said. “Other than the impacts right now on the stocker sector, most sectors have done pretty well (in 2017).”

“Cattle markets in rural communities, that just makes a rural community. If a rancher’s making money, then he’s out spending more money and buying feed and updating equipment and this and that and that spreads through this rural communities a lot,” Shepherd said. “(Cattlemen’s Association) have a huge impact on the cattle industry and ranching and farming in general with all that they do at the capitol plus other things.”

“We saw crude oil prices increase toward the end of the year which provides some optimism. There’s always some concern especially for those producers who are new to the industry, companies that are starting up, or companies that have sought out significant capital investment to fund drilling programs,” Bannister said.

He said one concern however, has been discussions revolving around the gross production tax, and what will happen during the new special session and regular new legislative session in the new year. One of the biggest concerns is the impact changes on the tax system could have on start-up producers.

“I think last time we counted it, in Tulsa alone there were 40 new companies that were oil and gas producers funded through private equity investments. So that’s a lot people, that’s a lot of jobs, that’s a lot of investment in Oklahoma that we don’t want to jeopardize, but I think that overall people are optimistic about what the future holds,” Bannister said.

On a more positive note though, Bannister said Oklahoma is at the forefront in oil and natural gas, and that with new technologies and related advancements, more opportunities are blossoming for increased development and production making for an optimistic future.

“The ebbs and flows of the oil and gas prices are part of the industry as well. But we also need to add stability in legislation and regulation over seeing the industry … stability is the key to continued growth in Oklahoma’s oil and natural gas industry,” Bannister said.

Another area of concern for the oil and natural gas industry is the wind industry, Bannister said. At its peak, the state took in more than a $1 billion from the gross production tax and natural gas averaged about $7 then, he said. For the last two years, it’s been about $2 or $3.

“That’s a significant change. It’s diminished exploration for natural gas in the state and it’s driven down the benefits to the state for natural gas … when you have significant tax provisions that encourage wind development at the cost of natural gas, it has a negative impact on the economy in our opinion,” Bannister said. “There has to be some continued movement to level the playing field between oil and natural gas, and the wind industry as far as from a legislative and tax outlook.”

“The oil and gas industry is the defining industry in Oklahoma. One-third of our gross domestic product comes from the oil and natural gas industry. One out of five jobs and a quarter of all taxed paid come from oil and natural gas industry. So without a doubt it is an important part of Oklahoma economy, if not the driving force behind it. And it’s especially true in communities like Enid,” he said.

“What is in those small towns of rural Oklahoma are the workers who make the oilfield run,” Bannister said. “Drilling superintendents and pipeliners and welders, and all those jobs are upon active drilling rigs and what we have to do in Oklahoma is ensure that we have a tax regulatory scheme that encourages continued development and continued drilling in Oklahoma.”