[michaelchisari]

I had a caveat in there about Texas that I decided to remove, should have kept it, but I'll respond here instead.

I think Texas' situation is too unique. They're effectively a petrostate right now. Now, they seem to be doing the right thing with things like the PSF and PUF, so I'd say that their approach, like their politics, is deeply purple, and it's not a terrible approach. But it's very specific, and not necessarily a model that other states can use.

[jandrewrogers]

Oil is only about 15% of the Texas economy, I would hardly classify it as a "petrostate". Real estate is a larger percentage of California's economy.

[velodrome]

> I think Texas' situation is too unique. They're effectively a petrostate right now.

Conveniently ignoring the fact that California is ALSO a petrostate.

https://www.usatoday.com/story/money/business/2013/08/03/the...

[michaelchisari]

Yes, California is third on a list where Texas is 1st. I don't think that disproves my point. Texas produces 35% of the country's crude oil.

In March of 2017, California produced 14,907,000 barrels of crude oil. Texas produced 102,443,000. That's 7x more. Play that against the fact that Texas' GDP is 2/3rd of California's. Oil has a massive impact in Texas that it simply doesn't have in California.

[velodrome]

Texas and California are diversified economies. Texas is more exposed to the oil & gas industry. However, it is still not a petrostate. Which state is the closest to being a petrostate? Alaska (25% exposure).

It is very easy to validate this. Look at the price of oil. It has taken a massive beating over the last years.

Oil Price History: https://fred.stlouisfed.org/series/DCOILWTICO/

If the state is truly a petrostate, it will clearly be reflected in its GDP.

California: https://fred.stlouisfed.org/series/CARGSP

Texas: https://fred.stlouisfed.org/series/TXNGSP

North Dakota: https://fred.stlouisfed.org/series/NDNGSP

Alaska: https://fred.stlouisfed.org/series/AKNGSP

Note the massive drop in oil prices after 2014. Alaska's GDP drops around roughly the same period.

Now let's compare this to ACTUAL petrostates.

Saudi Arabia: https://tradingeconomics.com/saudi-arabia/gdp

Columbia: https://tradingeconomics.com/colombia/gdp

Brazil: https://tradingeconomics.com/brazil/gdp

Norway: https://tradingeconomics.com/norway/gdp

Mexico: https://tradingeconomics.com/mexico/gdp

Kuwait: https://tradingeconomics.com/kuwait/gdp

Russia [1]: https://tradingeconomics.com/russia/gdp

Iran [1]: https://tradingeconomics.com/iran/gdp

[1] Sanctions

See the shortfall in GDP, that is a PETROSTATE.

In March of 2017, California produced 14,907,000 barrels of crude oil. Texas produced 102,443,000. That's 7x more. Play that against the fact that Texas' GDP is 2/3rd of California's. Oil has a massive impact in Texas that it simply doesn't have in California.

This is not a good measurement to determine the exposure of the industry to overall economy. It just shows the amount the barrels that can produce. The reason why there is a massive increase in production is due to shale (fracking). The cost of producing oil through fracking is a lot higher than pumping it out of the ground. Because they still have to sell it at market prices, the margin is a lot less for these producers. To compensate for this, these producers have to frack more out of the ground to stay afloat.

Shale Exposed

Texas Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

North Dakota Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

Non-Shale Exposed

Alaska Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

California Field Production of Crude Oil: https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M...

[michaelchisari]

I forgot that this is the wrong site to use hyperbole on.

No, it's not literally a petro-state. I stand by my point that it is not a reproducible model for other states.