That quote by American industrialist and founder of the Getty Oil Company, J. Paul Getty resonated throughout Ohio in 2014, but the recent historic drop below $50 a barrel for crude oil may lead some producers to reconsider his logic. In mid-2014, booming US shale production coupled with weaker economic growth in China and Europe resulted in global oversupply for oil. Those changing market forces led to a fundamental shift in the world of oil prices. In November, Saudi Arabia and their allies at the Organization of the Petroleum Exporting Countries (OPEC) decided to abandon oil price management, their underlying purpose over the last 40 years, and instead chose to prioritize market share. Combined with the US’s ascent to world leader in oil production, now energy managers and suppliers must operate in a much more competitive and complex free market era.
Lower prices at the pump have been a welcome relief to all consumers and an economic multiplier for Ohio’s bottom line. While businesses are saving money on transportation fuel costs, Ohio’s oil and gas industry is gaining market share by replacing the expense of transporting foreign oil. The growing production levels in the Utica and Marcellus region of not just oil but also natural gas represent a competitive economic advantage for Ohio.
The effects of the oil price collapse are not all positive, however. Ohio needs increased investments in energy infrastructure to meet its full economic potential and connect our abundant energy resources supply with the most economic markets, and these projects could be jeopardized if prices remain at historical lows. The Ohio Chamber will continue to support the sustainable development of our natural resources and encourage increased investments in reliable energy infrastructure to maximize our economic potential and improve the overall business climate.