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The Energy Economy: Where We’ve Been, Where We We’re Going (Maybe) Presentation for WSATA October 3, 2017 Tom Currah Chief Revenue Estimator Texas Comptroller of Public Accounts
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Overview Oil Prices and Production, a Brief History
Natural Gas Prices and Production, an Even Briefer History Electricity Generation, a Transition Recent Economic Effects Forecast
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1970: peaked at an average of 9
1970: peaked at an average of 9.6m bbl/day, with monthly peak in December of 1970; EIA is projecting that record will be broken in 2018 Monthly Production Data Source: U.S. Energy Information Administration
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$30/bbl in 1983 is about $75/bbl today
Data Source: U.S. Energy Information Administration
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Data Source: U.S. Energy Information Administration
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Data Source: U.S. Energy Information Administration
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This is electric power sector
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States Ranked by Annual Job Growth Rates
2010 2011 2012 2013 2014 2015 2016 2017* 1 North Dakota Utah Idaho Nevada 2 Alaska Michigan Florida Georgia 3 Texas Colorado Washington 4 South Carolina Wyoming Oregon 5 West Virginia California 6 Delaware Hawaii Maryland 7 Tennessee Oklahoma Arizona 8 Kentucky Virginia 9 Pennsylvania North Carolina New Hampshire 10 Indiana 41 Alabama Connecticut New Jersey Illinois Vermont 42 Rhode Island Nebraska Mississippi 43 Montana New Mexico Kansas 44 Missouri Maine 45 46 47 Louisiana 48 Arkansas 49 50 * 12 months ending August 2017 Data Sources: U.S. Bureau of Labor Statistics and Texas Comptroller of Public Accounts
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Forecast Oil prices rise to around $55/bbl over next two years
Natural gas prices remain relatively steady, around $3/mmbtu in same period Ready supply likely to hold prices in check If correct, good news for most states. Not as good for states reliant on oil and, especially, natural gas. In Texas, we think oil prices in $60 - $75 range is probably ideal – spurs activity in the sector, but does not raise energy prices so much as to be a drag on the economy.
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Data Sources: U.S. Energy Information Administration and Texas Comptroller of Public Accounts
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Forecast Oil Prices rise to around $55/bbl over next two years
Natural Gas Prices remain relatively steady, around $3/mmbtu in same period Ready supply likely to hold prices in check If correct, good news for most states. Not as good for states reliant on oil and, especially, natural gas. In Texas, we think oil prices in $60 - $75 range is probably ideal – spurs activity in the sector, but does not raise energy prices so much as to be a drag on the economy.
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Conclusion We expect relative stability in prices and production
But this is a volatile sector and stability has been rare over the last twenty years Uncertainty around such forecasts is relatively high EIA 95% confidence interval for oil prices in December 2018 is between $29 and $89 per barrel If correct, good news for most states. Not as good for states reliant on oil and, especially, natural gas. In Texas, we think oil prices in $60 - $75 range is probably ideal – spurs activity in the sector, but does not raise energy prices so much as to be a drag on the economy.
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Nat gas $ $5.30
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