1. 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

2. 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

3. 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

4. $30/bbl in 1983 is about $75/bbl today
Data Source: U.S. Energy Information Administration

5. Data Source: U.S. Energy Information Administration

7. Data Source: U.S. Energy Information Administration

12. This is electric power sector

15. 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

16. 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.

19. Data Sources: U.S. Energy Information Administration and Texas Comptroller of Public Accounts

20. 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.

21. 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.

22. Nat gas $ $5.30