The Shale Reckoning Comes to Oklahoma

[Oil Capital]

Bloomberg ran a devastating article yesterday on the oil bust in Oklahoma:

The Shale Reckoning Comes to Oklahoma

We all know that booms go bust. We have all been told that our economy is more diversified. The article points out that in 1982, 13% of Oklahoma workers' earnings were directly tied to the oil industry. When it went bust, Oklahoma had a recession that took more than a decade to fully recover from.

In 2015, 14% of paychecks in Oklahoma came from the oil industry. We aren't more diverse, we are more tied to oil and gas than ever. We went from the 4th Strongest GDP growth in the nation to dead last in six months. And the layoffs have just started. There was no diversification, more politician lies as they handed out more oil and gas incentives.

We have a $1.3 Billion shortfall now, in a state with an already poor education system and failing infrastructure...

Doom and gloom people. Someone post a puppy picture quick.

Small but important correction.  The 14% figure was for the end of 2014.   

The percentage will probably be lower in 2015 and lower still in 2016.  Voila!  We've "diversified".  ;-)

[SXSW]

Those two things are why UT being in Austin is such a coup for Texas.  It brings college town vibe and a great university to their capital city.  If OU was located in midtown Tulsa (like UT in Austin) then everything would be different.

Obviously not the same level but TU could be a larger job creator and incubator if it were larger and more integrated into its neighborhood/downtown.  It's already a respected Top 100 university it just doesn't have as big an impact with only 5k students. TU should aspire to be more like Vanderbilt or TCU, private universities that also are major research institutions.  The OU/TU medical school could end up being a big component of that growth.  A combined OU/TU research campus in Tulsa would be huge.

Energy will always be a significant part of Tulsa's economy.  Increasing the research and healthcare sectors should be a goal though as well as strengthening aerospace and tech.  And you can't do any of those without a good public  education system and a strong university.  Public education is in the state's hands but Tulsa needs to better advocate for a larger TU and expanded OSU/OU for public higher education offerings.

[LandArchPoke]

Small but important correction.  The 14% figure was for the end of 2014.  

The percentage will probably be lower in 2015 and lower still in 2016.  Voila!  We've "diversified".  ;-)

Also, that 14% is only a State of Oklahoma percentage. Not indicative of metro Tulsa. The oil and gas industry employment explosion happened in rural Oklahoma. Frankly most of the office "white collar" jobs from this oil boom happened in Houston, Oklahoma City, Calgary, etc. Tulsa did have good job growth from it, but it wasn't as dramatic as those other metros. In total, only 3-4% of Tulsa economy is directly related to the oil and gas industry anymore. Now, these job do have a much greater multiple effect (3x as opposed to the typical 1-2x) in support of additional jobs (secretaries, retail, food, etc.) so about 9 - 12% of Tulsa economy is dependent on oil and gas. Lets say oil stays down and it contracts back to were it was before the last shale boom? That means the our economy will contract in the next few years - bad? Yes. Catastrophic like many like to think? No. Unemployment might rise another 2-3% and put us slightly above the U.S. average, but we will come out of this cycle much quicker than the other oil metros.

Obviously not the same level but TU could be a larger job creator and incubator if it were larger and more integrated into its neighborhood/downtown.  It's already a respected Top 100 university it just doesn't have as big an impact with only 5k students. TU should aspire to be more like Vanderbilt or TCU, private universities that also are major research institutions.  The OU/TU medical school could end up being a big component of that growth.  A combined OU/TU research campus in Tulsa would be huge.

Energy will always be a significant part of Tulsa's economy.  Increasing the research and healthcare sectors should be a goal though as well as strengthening aerospace and tech.  And you can't do any of those without a good public  education system and a strong university.  Public education is in the state's hands but Tulsa needs to better advocate for a larger TU and expanded OSU/OU for public higher education offerings.

I'm glad you brought this up. I have also thought we do a very poor job of growing our research institutions in this state (OSU, TU, OU, etc.) If we truly want an economy that is stable our #1 focus needs to be on building up graduate university programs in Tulsa. Work with OSU to develop the Tulsa campus as it's primary location for all graduate school programs in the future. Stillwater retains what it has and is the primary undergrad focus, while students move to Tulsa for grad school. This puts students closer to employers anyways and makes it easier for OSU to recruit research students to a major metro versus Stillwater. This does nothing to harm the tradition of Stillwater. Same thing with TU, we need to work with them in terms of building up a research focus and add additional graduate school programs. OU is a much more difficult beast since they do have significant graduate programs already built in Norman.

The metro's that weather recessions the best are always the one's with major universities (Washington, Boston, San Francisco, Austin, Denver/Boulder, etc.).

I will ask this question - I know TCC is funded partly (or fully?) from property taxes. Is this just to pay operating expenses? Or can this be used to fund capital improvement projects? If it can support one or the other - why have we not looked into raising property taxes in Tulsa county to fund the expansion of universities in Tulsa either from an operations or capital improvements perspective (or both if possible)?

[SXSW]

Work with OSU to develop the Tulsa campus as it's primary location for all graduate school programs in the future. Stillwater retains what it has and is the primary undergrad focus, while students move to Tulsa for grad school. This puts students closer to employers anyways and makes it easier for OSU to recruit research students to a major metro versus Stillwater.

Yes I completely agree about OSU.  With the organic growth of the Brady into one of the better urban districts in this part of the country a major college campus literally next door, and potentially integrated into it in the future, is pretty exciting.  OSU should entirely focus its research and graduate programs in Tulsa, as well more undergraduate offerings autonomous from Stillwater.

[davideinstein]

Can't compromise the grad programs in Stillwater to make up for the downfalls of Tulsa. I'd probably enroll the first year it was available if there was an Urban Planning grad program at OSU-Tulss though.

[heironymouspasparagus]

I think it is somewhat harsh to say Oklahoma did nothing to diversify its economy.  It would be interesting to see how Oklahoma's economic dependence on the energy industry changed over the last 10 years.  I suspect that number was much smaller and grew rapidly along with Chesapeake, Devon, Continental, Sandridge, etc.  No city or state government rejects that kind of growth or tells companies to go somewhere else so as not to upset our economic diversity.  Like everyone else, they simply ride the wave and hope it doesn't crash on the rocks.

Indeed, think of Tulsa's efforts at diversification - aerospace, telecommunications, and rental cars.  Worked for a while, but unfortunately a lot of it has disappeared in the last 10 years.

There is no doubt that we need to re-imagine and diversify our economy in a way that is less dependent on the energy industry.  But make no mistake, no matter what we do, energy will again become a big part of our economy when oil prices rise.

We did a lot related to diversification...cut education.  Reduced road maintenance.  Closed recreational opportunities - state parks.  Allowed ongoing - accelerating - deterioration of infrastructure.  Restructuring tax methods to increase the burden on lower economic classes, while giving the uppers big bonuses - just like at the Federal level!  Not to encourage diversification, but to stifle it.

Reduced dependence and subsidies to oil industry by stop halting use of asphalt on the roads and moving to concrete...oh, wait...

[AquaMan]

Now you're talking heresy! Asphalt is the miracle substance that provides our sustenance!

Each day I drive the I-44 cloverleaf at 75 south in a commercial vehicle and marvel at the crazy methods used to maintain the surfaces. It was originally concrete. As the freeze/thaw and the heavy usage by tankers and dump trucks broke up the surface, they filled the potholes, some with concrete done poorly and some with asphalt even worse. The result is a bone rattling, suspension breaking experience. I presume that's a state maintenance program. Then throw in the morons who don't know how to enter and exit a cloverleaf, the cellphone addicts who can't be bothered to drop the phone and use the turn signal and its welcome to Tulsa.

[Breadburner]

Here is a good book for the rookies and youngsters in the oil biz....It should be required reading.....

http://www.amazon.com/Belly-Up-Collapse-Penn-Square/dp/0449902056

[heironymouspasparagus]

Here is a good book for the rookies and youngsters in the oil biz....It should be required reading.....

http://www.amazon.com/Belly-Up-Collapse-Penn-Square/dp/0449902056

Yes.  Especially by all of Congress, but since they are already bought and paid for, it won't help.


Hand in hand with the Savings and Loan debacle.  The one where the Bush family made several hundred million in the collapse of an S&L one of the brothers was in the middle of.  The general population never learns from history - it certainly isn't being taught in the gutted school systems, especially in this state - so we just keep on the same old tired nonsense path.  So we got rid of Glass-Steagal, causing the next big financial system crisis.  And have refused to fix it since then, so we are still heading in the same direction at the same speed.  It will happen again, just like the last one...probably worse!

And corporations are people...    Geez, what a bunch of nonsense psycho-babble.

[Breadburner]

Yes.  Especially by all of Congress, but since they are already bought and paid for, it won't help.


Hand in hand with the Savings and Loan debacle.  The one where the Bush family made several hundred million in the collapse of an S&L one of the brothers was in the middle of.  The general population never learns from history - it certainly isn't being taught in the gutted school systems, especially in this state - so we just keep on the same old tired nonsense path.  So we got rid of Glass-Steagal, causing the next big financial system crisis.  And have refused to fix it since then, so we are still heading in the same direction at the same speed.  It will happen again, just like the last one...probably worse!

And corporations are people...    Geez, what a bunch of nonsense psycho-babble.

pancakes...Are you babbling about......

[heironymouspasparagus]

pancakes...Are you babbling about......

Oh....sorry... thought you would recognize it.  I was agreeing with you.

[LandArchPoke]

Can't compromise the grad programs in Stillwater to make up for the downfalls of Tulsa. I'd probably enroll the first year it was available if there was an Urban Planning grad program at OSU-Tulss though.

I would agree with the Urban Planning program comment. It shocks me that OSU with as great of an architecture school doesn't have any graduate programs for the built environment. OSU in total is lacking in the graduate school department, to me that's one of the reason the school is ranked so low in many of the US/World rankings. I wish the school would position itself more like Iowa State or Nebraska and really beef up its research and grad school - and do this on the Tulsa campus. It doesn't have to compromise any of the current grad school programs in Stillwater because there's so much opportunity for them to expand, the Architecture and other design related programs are just one example.

[davideinstein]

I would agree with the Urban Planning program comment. It shocks me that OSU with as great of an architecture school doesn't have any graduate programs for the built environment. OSU in total is lacking in the graduate school department, to me that's one of the reason the school is ranked so low in many of the US/World rankings. I wish the school would position itself more like Iowa State or Nebraska and really beef up its research and grad school - and do this on the Tulsa campus. It doesn't have to compromise any of the current grad school programs in Stillwater because there's so much opportunity for them to expand, the Architecture and other design related programs are just one example.

Completely agree. Branding Success has helped that some at least.

[DowntownDan]

I would agree with the Urban Planning program comment. It shocks me that OSU with as great of an architecture school doesn't have any graduate programs for the built environment. OSU in total is lacking in the graduate school department, to me that's one of the reason the school is ranked so low in many of the US/World rankings. I wish the school would position itself more like Iowa State or Nebraska and really beef up its research and grad school - and do this on the Tulsa campus. It doesn't have to compromise any of the current grad school programs in Stillwater because there's so much opportunity for them to expand, the Architecture and other design related programs are just one example.

It would need to be an expansion on graduate research, not a relocation from Stillwater.  Both campuses need to beef up research and they can do it together with the campuses focused on different areas, if they do it right.

[heironymouspasparagus]

It would need to be an expansion on graduate research, not a relocation from Stillwater.  Both campuses need to beef up research and they can do it together with the campuses focused on different areas, if they do it right.

Sadly...won't happen.