What is the OERB

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Teaching Others About the Industry

• What is the OERB?
• What is Big Oil?
• What is the industrys role in the Economy?
• Is there enough energy to go around?
• How does the industry effect the Environment?
• Other great things Oklahoma Energy Pros are doing
  in this great state

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OERB

• Formed in 1993 by the state legislature at the
  request of petroleum industry
• The purpose of the Board is to coordinate a
  program designed to demonstrate to the general
  public the importance of the Oklahoma oil and
  natural gas exploration and production industry,
  to encourage the wise and efficient use of energy
  and to cause remediation of historical oilfield
  environmental problems

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Funding

• Funded by a voluntary one-tenth of one percent
  (0.1) assessment on the sale of oil and natural
  gas in Oklahoma (1996)
• One of the most largely supported check-off
  programs in existence

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What is Petroleum? The Origin of Hydrocarbon
2) Over time continued burial subjected these
Organic Rich Muds to increased Heat and Pressure
forming Hydrocarbon source rocks.

• Hydrocarbons (Crude Oil and Natural Gas) migrated
  from the source rocks toward the surface
  sometimes being trapped in reservoir rocks.

1) Plants and Animals died and fell to the
bottom of the sea forming Organic Rich Muds.
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Oil and Natural Gas are also known as Hydrocarbons
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Petrochemical Products
(Over 6,000 total)
Ink Crayons Heart Valves Enamel Panty
Hose Epoxy Motorcycle Helmets Electrical
Tape Floor Wax Toothbrushes Combs Lipstick Tennis
Racquets Ice Chests Eyeglasses Toilet Seats
Movie Film Aspirin Golf Balls Detergents Linoleum
Dice Soft Contacts Trash Bags Shaving
Cream Water Pipes Permanent-press Credit
Cards Clothes Denture Adhesive Life Jackets Tires
Anesthetics Artificial Limbs Dentures Boats Nail
Polish Skis Slacks Fishing Lures Petroleum
Jelly Cortisone Dyes Nylon Rope Rubber
Cement Umbrellas Antifreeze Balloons
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Drilling Wells is Expensive

• 1,000 ft gas well in Kay County - 50,000
• 4,000 ft oil well in Kay County- 200,000
• 15,000 ft gas well in Custer County - 1,500,000
• 25,000 ft gas well in Beckham County- 8,000,000
• 15,000 ft oil and gas well in 3,000 ft of water
  in the Gulf of Mexico - 50,000,000

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Who Owns Big Oil You Do?

• 1.5 of shares owned by corporate management
• 5 owned by Institutional Investors
• 55 million U.S. households have mutual funds
• 45 million U.S. households have IRA or
  retirement accounts

Source The Truth About Oil and Gasoline An API
Primer
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Rhetoric vs. Reality Gasoline Prices
RHETORIC Oil companies are to blame for the
high price of gasoline. REALITY Many factors
affect the price of gasoline, including the price
of oil and the amount of demand.
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Gasoline Prices

• Crude oil and petroleum are global commodities
• Prices are set by supply and demand on a
  worldwide basis
• Unexpected growth in Chinese economy worldwide
  demand for petroleum

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Gasoline Prices Where Does My Money Go?
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Rhetoric vs. Reality - No More Tax Breaks
RHETORIC Its time to end tax breaks for big
oil and make these companies pay their fair share
in taxes. REALITY Oil companies already pay
nearly twice as much in income taxes as other
U.S. manufacturing companies 40.7
Source The Truth About Oil and Gasoline An API
Primer
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Rhetoric vs. Reality - No More Tax Breaks
REALITY After taxes are paid, U.S. oil and
natural gas companies earn far less than many
other industries in the country.
Source The Truth About Oil and Gasoline An API
Primer
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Industry Taxes Paid in Oklahoma

• 2.05 Billion in tax generated in FY07 includes
  gross production, personal income, corporate
  income, etc.
• Almost 1 Billion in gross production taxes
  alone in FY07

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Gross Production Tax Allocation
FY-2007
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Industry Employment
Latest Economic Impact Report - Released July
2008

• 76,000 direct jobs or 3.3 of the total state
  workforce
• Supports another 245,800 jobs
• Each direct job by the oil and natural gas sector
  supports 3.2 additional jobs in the broader state
  economy

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Rhetoric vs. Reality Energy Security
RHETORIC We need to get off oil and use
renewable and alternative energy
instead REALITY The U.S. Department of Energy
estimates that fossil fuels will continue to meet
at least 80 of energy demand around the world
through 2030.

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Rhetoric vs. Reality Energy Security

• Abundant volumes oil natural gas beneath
  federal lands coastal waters
• Enough to run 65 million cars for 65 years
• 85 of coastal waters are off-limits to
  exploration
• Enough energy beneath the land to heat 60
  million homes for another 160 years

Source The Truth About Oil and Gasoline An API
Primer

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• RHETORIC Oil and natural gas companies are given
  leases by the government and purposely dont
  produce from them to increase prices.
• REALITY Oil and natural gas companies are given
  leases by the government and purposely dont
  produce from them to increase prices.
• RHETORIC Companies let many of their leases sit
  idle and dont produce them.
• REALITY Companies actively develop their leases
  but not every lease contains oil or natural gas
  in commercial quantities.

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• RHETORIC Increased domestic drilling activity
  has not led to lower gasoline prices, and more
  leases and drilling wont help either.
• REALITY Our nation needs more supplies of all
  forms of energy, including domestic oil and
  natural gas, to meet its growing energy demand.
• RHETORIC Companies should be penalized for not
  producing from their leases.
• REALITY Oil and gas companies take all the risk
  with federal leases.

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Alaskan National Wildlife Reserve
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• 2,000 acres
• Northern Alaska
• Out of 19 million total acres

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• Coastal plain
• Area the size of South Carolina
• Near five other previously developed sites

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WINTER
SUMMER
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SUMMER
WINTER
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Rhetoric vs. Reality Energy Security

• Todays earnings are reinvested for tomorrows
  energy needs
• 1.2 trillion spent on long-term initiatives
  from 1996-2007

Source The Truth About Oil and Gasoline An API
Primer
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Rhetoric vs. Reality Energy Security

• 12 increase in refining capacity
• More cost effective to expand than to add new
  refineries
• Expansions will boost capacity by 800,000
  barrels/day by 2010

Source The Truth About Oil and Gasoline An API
Primer

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Oil Natural Gas Production in Oklahoma
OKLAHOMA (2007)

• 3rd in natural gas production
• 4th in natural gas reserves
• 5th in crude oil production
• 6th in crude oil reserves

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Conservation Education

• Conservation Education Program launched in 2005
• Designed to help Oklahomans conserve energy while
  saving money
• Education campaign includes television, radio,
  print and online (www.oerb.com)

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Assistance Fund

• OERB Conservation Assistance Fund
• Contributed 1.75 million to OK Dept. of Commerce
  Weatherization Assistance Program
• Provides energy aid for low-income households
• Provides free weatherization services,
• saving Oklahomans in need up to 30 on heating
  bills

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Rhetoric vs. Reality - Environment
RHETORIC Allowing oil companies to drill would
ruin the environment on our lands off our
coasts. REALITY 4D seismic imaging and
multi-directional drilling help reduce the
environmental impact
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Rhetoric vs. Reality - Environment
REALITY Today its possible to develop nearly 80
square miles of area below the surface from a
single two-acre site on the surface.
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Rhetoric vs. Reality - Environment
REALITY The U. S. oil and natural gas industry
has invested more than 160 billion since 1990
toward improving its environmental performance.
Source The Truth About Oil and Gasoline An API
Primer
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OERB Environmental Budget

• FY-08 - 7.75 million
• FY-09 - 8.25 million

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Cleanup Responsibilities

• Surface damages only
• Not responsible for plugging
• Orphaned/Abandoned sites with no responsible
  party

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Site Submittal Process

• Typically a site is submitted by landowner
• In all counties but Osage, the OCC determines if
  there is a responsible party. In Osage County,
  the BIA makes this determination
• Property owners can contact either the OERB or
  the OCC
• Property owner must provide legal description,
  landowner contact information and summary of EP
  site restoration issues

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Environmental Clean-Up
Before
After
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Environmental Clean-Up
Before
After
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Environmental Clean-Up
Before
After
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Environmental Clean-Up
Before
After
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Results
Numbers represent Restored sites by county
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• More than 1 Million in college scholarships
  awarded
• More than 1 Million minds taught through Petro
  Active, Fossils to Fuels and CORE Energy programs
• Teachers trained
• Petro Pros who volunteer to speak in classrooms
  across the state

Powering Education

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Shifting Perceptions
Oklahomans continue to say their image of the
industry is improving (44) at a much more
substantial rate than seen in neighboring states.
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Image of the Industry
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Oklahomas Oil Natural Gas Producers Royalty
Owners

• No other industry in Oklahoma has done more, paid
  more and is spending more to make Oklahoma great
  this very day.
• America needs our energy, and the role Oklahomas
  Oil and Natural Gas Producers and Royalty Owners
  serves in empowering our nation should be a
  beacon of pride for every man, woman and child in
  our state.

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