An Energetic Decade: Economic Growth in the Western States, 2007 - - PowerPoint PPT Presentation

Texas Comptroller of Public Accounts An Energetic Decade: Economic Growth in the Western States, 2007 - 2017 Presentation for WSATA September 25, 2018 Tom Currah Chief Revenue Estimator Texas Comptroller of Public Accounts

Texas Comptroller of Public Accounts Overview • Shaming the Presenter: A Look Back at Last Year’s Forecast • A Brief History of Oil and Natural Gas Prices and Production • Energy and Economic Growth Since 2007 • Economic Growth in WSATA States • Yet Another Attempt to Accurately Forecast Oil and Gas Prices 2

Texas Comptroller of Public Accounts Forecast From 2017 WSATA Presentation • 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 3

Texas Comptroller of Public Accounts Results • 2017 Forecast: $55/bbl over next two years – Average Price Last 12 Months: $62.22 – Average Price, August 2018: $67.85 • Natural Gas Prices around $3/mmbtu in same period – Average Price Last 12 Months: $2.87 – Average Price, August 2018: $2.91 4

100000 150000 200000 250000 300000 350000 50000 Data Source: U.S. Energy Information Administration 0 Jan-1920 May-1922 Sep-1924 Jan-1927 May-1929 U.S. Field Production of Crude Oil (Monthly, Thousands of Sep-1931 Jan-1934 May-1936 Sep-1938 Jan-1941 May-1943 Sep-1945 Jan-1948 May-1950 Sep-1952 Jan-1955 May-1957 Sep-1959 Jan-1962 Barrels) May-1964 Sep-1966 Jan-1969 May-1971 Sep-1973 Jan-1976 May-1978 Sep-1980 Jan-1983 May-1985 Sep-1987 Jan-1990 May-1992 Sep-1994 Jan-1997 May-1999 Sep-2001 Jan-2004 May-2006 Sep-2008 Jan-2011 5 May-2013 Sep-2015 Jan-2018

100 120 140 160 20 40 60 80 0 Jan-1986 Oct-1986 Jul-1987 Apr-1988 Jan-1989 Oct-1989 Jul-1990 Apr-1991 Jan-1992 Oct-1992 Jul-1993 Apr-1994 Jan-1995 Oct-1995 Oil Price, Monthly Average, $bbl Jul-1996 Apr-1997 Jan-1998 Oct-1998 Jul-1999 Apr-2000 Jan-2001 Oct-2001 Jul-2002 Apr-2003 Jan-2004 Oct-2004 Jul-2005 Apr-2006 Jan-2007 Oct-2007 Jul-2008 Apr-2009 Jan-2010 Oct-2010 Jul-2011 Apr-2012 Jan-2013 Oct-2013 Jul-2014 Apr-2015 Jan-2016 6 Oct-2016 Jul-2017 Apr-2018

$10 $12 $14 $16 $0 $2 $4 $6 $8 Jan-1997 Jul-1997 Jan-1998 Jul-1998 Jan-1999 Jul-1999 Jan-2000 Natural Gas Prices, Monthly Average ($ Million Btu) Jul-2000 Jan-2001 Jul-2001 Jan-2002 Jul-2002 Jan-2003 Jul-2003 Jan-2004 Jul-2004 Jan-2005 Jul-2005 Jan-2006 Jul-2006 Jan-2007 Jul-2007 Jan-2008 Jul-2008 Jan-2009 Jul-2009 Jan-2010 Jul-2010 Jan-2011 Jul-2011 Jan-2012 Jul-2012 Jan-2013 Jul-2013 Jan-2014 Jul-2014 Jan-2015 Jul-2015 Jan-2016 Jul-2016 Jan-2017 7 Jul-2017 Jan-2018 Jul-2018

8

9

10

-10.0% 10.0% 15.0% 20.0% -5.0% 0.0% 5.0% Utah North Dakota Texas Colorado Washington Idaho California Massachusetts Florida New York Oregon South Carolina Tennessee Georgia South Dakota Job Growth, 2007 – 2017 North Carolina Montana Orange Bars are Energy States Minnesota Nebraska Nevada Virginia Hawaii Oklahoma New Hampshire Arizona Indiana Maryland Iowa Kentucky Michigan Delaware Pennsylvania Missouri Wisconsin Arkansas Alaska Ohio Rhode Island Louisiana Kansas Vermont Illinois New Jersey Maine Mississippi Alabama 11 Connecticut West Virginia New Mexico Wyoming

1,000,000 1,200,000 1,400,000 200,000 400,000 600,000 800,000 - Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Bakken, Barrels of Oil Per Day Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 12 Jan-18 May-18 Sep-18

100,000 200,000 300,000 400,000 500,000 600,000 700,000 - Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Niobrara, Barrels of Oil per Day Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 13 Jan-18 May-18 Sep-18

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 500,000 - Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Permian Basin, Barrels of Oil Per Day Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 14 Jan-18 May-18 Sep-18

1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 - Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 Niborara, Mcf of Natural Gas Per Day May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 15 Jan-18 May-18 Sep-18

10,000,000 12,000,000 14,000,000 2,000,000 4,000,000 6,000,000 8,000,000 - Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 Permian, Mcf of Natural Gas per Day May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 16 Jan-18 May-18 Sep-18

17

10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000 5,000,000 - Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Appalachia, Mcf of Natural Gas per Day Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 18 Jan-18 May-18 Sep-18

U.S. coal production Components of annual change million short tons million short tons 100 90 forecast 46 50 75 0 60 -6 -12 -50 45 Western region monthly history monthly forecast -100 30 Appalachian region annual average -150 15 Interior region -169 -200 0 2016 2017 2018 2019 2015 2016 2017 2018 2019 Source: Short-Term Energy Outlook, September 2018 19

U.S. electricity generation by fuel, all sectors million megawatthours per day 12.5 forecast 10 coal 28% 27% 30% 30% 33% 39% 37% 39% 7.5 35% 34% natural gas 32% 34% 33% 28% 30% 28% 5 nuclear 2.5 non-hydro renewables hydropower other 0 2012 2013 2014 2015 2016 2017 2018 2019 Note: Labels show percentage share of total generation provided by coal and natural gas. Source: Short-Term Energy Outlook, September 2018 20

-10.0% 10.0% 15.0% 20.0% -5.0% 0.0% 5.0% Utah North Dakota Texas Colorado Washington Idaho California Massachusetts Florida New York Oregon South Carolina Tennessee Georgia South Dakota Job Growth, 2007 – 2017 North Carolina Montana Minnesota Red Bars are WSATA States Nebraska Nevada Virginia Hawaii Oklahoma New Hampshire Arizona Indiana Maryland Iowa Kentucky Michigan Delaware Pennsylvania Missouri Wisconsin Arkansas Alaska Ohio Rhode Island Louisiana Kansas Vermont Illinois New Jersey Maine Mississippi Alabama 21 Connecticut West Virginia New Mexico Wyoming

-7.0% -5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 7.0% Alaska Wyoming Texas Washington Montana Utah Louisiana South Dakota Idaho Colorado Nebraska Oklahoma North Dakota North Carolina Alabama New Mexico South Carolina Mississippi Oregon Kansas Job Growth, 2007 Arkansas Massachusetts Virginia Georgia Maine Iowa Nevada Illinois Wisconsin Minnesota Missouri Pennsylvania New York Kentucky California Tennessee Maryland New Hampshire Connecticut Hawaii Natural Gas: $6.97 Oil: $72.41 Indiana West Virginia New Jersey Arizona Delaware Ohio Vermont Michigan 22 Florida Rhode Island

-7.0% -5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 7.0% North Dakota Alaska Wyoming Oklahoma South Dakota Texas Louisiana West Virginia Kansas Nebraska New York Iowa Massachusetts Virginia Pennsylvania New Hampshire Colorado New Mexico Wisconsin Minnesota Job Growth, 2008 Washington Arkansas Montana Missouri Vermont Maryland Connecticut Maine Illinois New Jersey Utah Mississippi Kentucky Delaware North Carolina Ohio Alabama Tennessee California Indiana Rhode Island Natural Gas: $8.86 Oil: $99.75 Georgia South Carolina Hawaii Idaho Oregon Michigan Arizona 23 Florida Nevada

-7.0% -5.0% -3.0% -1.0% 1.0% 3.0% 5.0% 7.0% North Dakota Nevada Colorado Texas Florida Georgia Oregon Utah South Carolina California Washington Delaware Massachusetts Tennessee Idaho North Carolina Louisiana Arkansas Arizona Oklahoma Job Growth, 2014 Rhode Island Michigan New York Ohio Kentucky Wyoming New Mexico Wisconsin Indiana Illinois Missouri Maryland Alabama Minnesota Pennsylvania South Dakota Connecticut New Hampshire Kansas Iowa New Jersey Natural Gas: $4.37 Oil: $92.91 Nebraska Mississippi Maine Virginia Montana Vermont Alaska 24 Hawaii West Virginia