BOK Park Plaza

[jccouger]

I mean read the thread title, it's called "BOK Park Plaza." Devon is/was only taking up part of the building...their name isn't even on it. I thought the primary goal of this building was to privide a consolidated space for BOK's OKC operations.

Also you act like that because Devon didn't predict $20 oil two years ago while planning this, that they should just stop building it because of today's pricing environment. Similarly, no one really knows what commodities pricing will look like when this is completed, just as Devon didn't when they constructed the tower at $30 oil and $3 gas. General sentiment is that the price of oil will be higher in 2 years, so that's what their planning on.

The name of the thread & the name of the building says BOK, but the content of this thread & the employees inside this future building are mostly made up of Devon. Isn't BOK only expected to take up like 2 floors or something like that?

Its kind of just like how Rainey Williams was used to destroy Stage Center. He absorbs the bad press so OGE didn't have to deal with it. Just like how Devon can get away with firing a ton of employees without feeling the public backlash of building a brand new building at the same time, because the public thinks this is BOK.

If Devon truly believed oil was going to go back up soon, and I consider 2 years soon, then I don't think they'd be letting go of 40% of their employees. Hopefully I'm wrong & oil goes back up, and I say this with complete sincerity, I also hope that this tower gets built no matter what happens.

[bchris02]

I also hope that this tower gets built no matter what happens.

This.

Considering what was lost on this block, to have the tower delayed/stalled would be a disaster for downtown.

As far as I know Devon isn't the owner of the new tower are they? Weren't they just going to lease space in it? If Devon was the owner and the developer, I would be a lot more concerned about it than if its being built by an outside developer as a spec tower.

[Pete]

The financing is already in place and they are deep into construction.

Almost no chance this project gets halted.

[Fly on the Wall]

Haven't seen a progress picture here in a bit so I'll post a couple.

[Bellaboo]

^^^ Moving on up ! ^^^

[Bellaboo]

This.

Considering what was lost on this block, to have the tower delayed/stalled would be a disaster for downtown.

As far as I know Devon isn't the owner of the new tower are they? Weren't they just going to lease space in it? If Devon was the owner and the developer, I would be a lot more concerned about it than if its being built by an outside developer as a spec tower.

BOK is moving into this tower too.

[bchris02]

Theoretically, what would happen if Devon decided they didn't need the space and pulled out of this deal before the tower was completed?

Like I said, it's unusual for a tower to be halted mid-construction when there isn't a national financial crisis. However, with the way things are looking with the economy in OKC right now, I am wondering about this "what if?".

[Pete]

Devon has signed leases obligating themselves; they only thing they could really do is sub-lease space but I'm sure they won't do that.

[Pete]

They are really moving on this project:

[Swake]

I mean read the thread title, it's called "BOK Park Plaza." Devon is/was only taking up part of the building...their name isn't even on it. I thought the primary goal of this building was to privide a consolidated space for BOK's OKC operations.

Also you act like that because Devon didn't predict $20 oil two years ago while planning this, that they should just stop building it because of today's pricing environment. Similarly, no one really knows what commodities pricing will look like when this is completed, just as Devon didn't when they constructed the tower at $30 oil and $3 gas. General sentiment is that the price of oil will be higher in 2 years, so that's what their planning on.

Oil is going to go up? Supply is increasing right now as Iran’s oil starts to come to market and with ISIS starting to fade in Iraq. That's at the same time as demand is weak with the BRIC countries starting to really have hard times economically. I think oil is looking to go down, and two years seems too short for oil to fully recover.

The hard part is, anything much longer than say two or three years and electric cars are going to be starting to seriously eat away at the demand for oil, even with a China recovery. Not even counting what’s happening here and in Europe electric cars are exploding in China and with the pollution problems they have in the cities there and in India, they are going to have to go electric as soon as possible.

The difficult and very possibly real answer is, oil may never fully recover.

[PhiAlpha]

Oil is going to go up? Supply is increasing right now as Iran’s oil starts to come to market and with ISIS starting to fade in Iraq. That's at the same time as demand is weak with the BRIC countries starting to really have hard times economically. I think oil is looking to go down, and two years seems too short for oil to fully recover.

The hard part is, anything much longer than say two or three years and electric cars are going to be starting to seriously eat away at the demand for oil, even with a China recovery. Not even counting what’s happening here and in Europe electric cars are exploding in China and with the pollution problems they have in the cities there and in India, they are going to have to go electric as soon as possible.

The difficult and very possibly real answer is, oil may never fully recover.

It depends on what you consider fully, but we'll have to agree to disagree.

[HangryHippo]

It depends on what you consider fully, but we'll have to agree to disagree.

What do you see happening?

[Laramie]

Crude oil market to recover in 2016, Continental's Harold Hamm predicts - Continental Resources, Inc. (NYSE:CLR) | Seeking Alpha

[shawnw]

In 2014 there were 87 million cars produced globally. The global projection for electric car production by 2020 (by a green advocacy source, so possibly a high estimate) is 3 million (9 million electric and hybrid). Probably a ways to go before oil demand is eaten away at, by electric cars anyway.

[Pete]

And in the U.S., 27% of all electricity is produced by natural gas.

[BG918]

It depends on what you consider fully, but we'll have to agree to disagree.

I doubt it fully recovers in that oil is $100+ / barrel. But $50-60 is likely. The question will be when does that happen, and you'll get different answers from everyone including so-called experts like Harold Hamm.

[Swake]

It depends on what you consider fully, but we'll have to agree to disagree.

I would call $75 a full recovery. I say it’s very doubtful that’s possible in two years, if ever. Devon is laying off 30-40% of its workforce and we aren’t even at the bottom yet. The bottom may not even be in sight yet:

Iranian oil likely to push prices lower

Iran's oil ministers say they intend to boost their oil production and ship 500,000 barrels a day initially, now that sanctions have been lifted in light of nuclear inspections deal, the Islamic Republic News Agency reported. Iran's goal is 2 million barrels a day.
Eshaq Jahangiri, Iran's First Vice President, said Monday that his nation's oil exports will increase soon and grow further "on a daily basis," the news agency also reported.
The higher production levels alone are big enough to further depress the price of oil, especially since Saudi Arabia has refused to cut its production levels.
The result could lead to oil prices in the mid-$20s a barrel, and with occasional bouts of panic selling, briefly dip into the teens, said Tom Kloza, global head of energy analysis for the Oil Price Information Service.

Can oil go lower? ?An emphatic yes?, says IEA

Iran insists it will boost output by an immediate 500,000 barrels per day. The IEA believes that by the end of the first quarter, around 300,000 barrels a day of additional crude oil could be flowing to world markets.
And with little prospect of global growth picking up, the IEA warned that "unless something changes, the oil market could drown in over-supply". "So the answer to our question (can it go any lower?) is an emphatic yes."

How many does Devon let go at $18 a barrel? Devon may well never occupy this building.

[Swake]

In 2014 there were 87 million cars produced globally. The global projection for electric car production by 2020 (by a green advocacy source, so possibly a high estimate) is 3 million (9 million electric and hybrid). Probably a ways to go before oil demand is eaten away at, by electric cars anyway.

9 million by 2020? That’s more than 10% of the market. That’s huge. Transportation makes up 40% of the demand for oil globally, if you lower the amount of oil used by transportation by 10% that’s a 4% fall in global demand for oil. That’s a big drop in just four years. Combine that with the growing trend of cities in Europe banning cars in city centers and cities in India and China only allowing cars on every other day to lower pollution you will see an even further drop in demand.

[Swake]

And in the U.S., 27% of all electricity is produced by natural gas.

And that's likely to grow as we and other countries move away from coal.

[Pete]

We need to cool the "Devon is laying off 30% to 40% of their workforce" talk.

That is highly speculative and I seriously doubt that information is real or even accurate.

This keeps getting repeated as fact and it absolutely is not.

[PhiAlpha]

9 million by 2020? That’s more than 10% of the market. That’s huge. Transportation makes up 40% of the demand for oil globally, if you lower the amount of oil used by transportation by 10% that’s a 4% fall in global demand for oil. That’s a big drop in just four years. Combine that with the growing trend of cities in Europe banning cars in city centers and cities in India and China only allowing cars on every other day to lower pollution you will see an even further drop in demand.

A green advocacy group's electrical car production projection is likely inflated as shawnw mentioned. Also increased production doesn't always translate to increased sales. I didn't see when those projections were made, but they likely made them without taking into account the massive decrease in the price of gasoline if made before midway through 2015. In order for there to be an incentive for consumers to purchase electric cars, which are generally much more expensive, less convenient (more refuels that take much longer than gasoline or other alternatives like CNG) , and smaller for the same price as a gasoline powered vehicle, there has to be a cost incentive. There are people buying them to "save the environment" but I would guess those buyers are few and far between. Right now and for the next few years if oil prices stay low and vehicle fuel efficiency continues to increase, there will be almost zero incentive to crank out the extra money for a less convenient, smaller, and more expensive vehicle.

Albeit on a small scale, you can see this trend happening with CNG vehicles in Oklahoma right now which are an easier, cheaper, and more convenient conversion or a cheaper new car purchase than electric. The price of CNG is still cheaper than gasoline and conversions/new car purchases are still subsidized by the state and federal governments but conversions and new car purchases have tanked because they can't economically justify the premium for those vehicles when gasoline prices are so low.

As Pete mentioned, natural gas accounts for 27% of electrical production and that number is increasing faster than renewable sources as coal fired power plants are replaced. Any move to electric from gasoline vehicles will be at least partially offset by the increase in use of electricity generated by natural gas.

Bottom line, I don't think the move to electric cars will be as rapid as predicted, especially now that gasoline prices have dropped so much over the last two years. I certainly don't think electric car usage will have a major effect on oil demand over the next 5-10 years. Fuel efficiency and alternatives are increasing, but so are total gasoline powered vehicles purchased and that is projected to continue rising through 2020.

[Swake]

An green advocacy group's electrical car production projection is likely inflated as shawnw mentioned. Also increased production doesn't always translate to increased sales. I didn't see when those projections were made, but they likely made them without taking into account the massive decrease in the price of gasoline if made before midway through 2015. In order for there to be an incentive for consumers to purchase electric cars, which are generally much more expensive, less convenient (more refuels that take much longer than gasoline or other alternatives like CNG) , and smaller for the same price as a gasoline powered vehicle, there has to be a cost incentive. There are people buying them to "save the environment" but I would guess those buyers are few and far between. Right now and for the next few years if oil prices stay low and vehicle fuel efficiency continues to increase, there will be almost zero incentive to crank out the extra money for a less convenient, smaller, and more expensive vehicle.

Albeit on a small scale, you can see this trend happening with CNG vehicles in Oklahoma right now which are an easier, cheaper, and more convenient conversion or a cheaper new car purchase than electric. The price of CNG is still cheaper than gasoline and conversions/new car purchases are still subsidized by the state and federal governments but conversions and new car purchases have tanked because they can't economically justify the premium for those vehicles when gasoline prices are so low.

As Pete mentioned, natural gas accounts for 27% of electrical production and that number is increasing faster than renewable sources as coal fired power plants are replaced. Any move to electric from gasoline vehicles will be at least partially offset by the increase in use of electricity generated by natural gas.

Bottom line, I don't think the move to electric cars will be as rapid as predicted, especially now that gasoline prices have dropped so much over the last two years. I certainly don't think electric car usage will have a major effect on oil demand over the next 5-10 years. Fuel efficiency and alternatives are increasing, but so are total gasoline powered vehicles purchased and that is projected to continue rising through 2020.

I agree the market for Natural Gas is going to grow a lot. The long term safe haven for Oklahoma’s energy industry will be natural gas. It’s oil that I see as in deep trouble. I think we will see the reverse of what happened five or so years ago when Oklahoma energy companies worked so hard to move to oil from NG.

You are correct to an extent about electric cars in this country being hurt by low gas prices, but electric cars will still be cheaper to run than gas, will be better for the environment and should be more reliable as well with many fewer systems and moving parts. Prices are already dropping for electric cars as economies of scale start to play into their production. Once prices are equal between a gas powered car and an electric one with decent range a lot of people are going to choose electric no matter what the price of gas is. That price point very close to being here.

That all aside, it’s in Europe, China and India where electric is really will take off. Europe takes global warming much more seriously than we do and diesel has now turned out to not be the answer there. China and India have no choice or their residents are going to start dropping dead in the streets from pollution. I would not be shocked to see new gas cars banned in those countries before long.

[shawnw]

I would not be shocked to see new gas cars banned in those countries before long.

I'm not sure "before long" is going to be practical... eventually sure....

[PhiAlpha]

I agree the market for Natural Gas is going to grow a lot. The long term safe haven for Oklahoma’s energy industry will be natural gas. It’s oil that I see as in deep trouble. I think we will see the reverse of what happened five or so years ago when Oklahoma energy companies worked so hard to move to oil from NG.

You are correct to an extent about electric cars in this country being hurt by low gas prices, but electric cars will still be cheaper to run than gas, will be better for the environment and should be more reliable as well with many fewer systems and moving parts. Prices are already dropping for electric cars as economies of scale start to play into their production. Once prices are equal between a gas powered car and an electric one with decent range a lot of people are going to choose electric no matter what the price of gas is. That price point very close to being here.

That all aside, it’s in Europe, China and India where electric is really will take off. Europe takes global warming much more seriously than we do and diesel has now turned out to not be the answer there. China and India have no choice or their residents are going to start dropping dead in the streets from pollution. I would not be shocked to see new gas cars banned in those countries before long.

On the first bolded point, i think it will largely depend on how much charging time drops and how much car you can get relative to price. Many people with families aren't going to want a tiny electric car for the same prices as a larger gasoline powered SUV, crossover or Minivan. New electric cars will also be competing with much cheaper used vehicles for a while which will again make it difficult to justify the cost of buying a new electric car.

On the second, Europe does take global warming more seriously, but their interest in electric cars has much more to do with them paying $6-$10 a gallon on gas for the last decade and above 4 prior to that. If their gasoline prices drop like ours have, it will hurt their electric car demand as well.

Electric cars will get the market share eventually, I just don't think it will happen anywhere that quickly.

[Swake]

On the first bolded point, i think it will largely depend on how much charging time drops and how much car you can get relative to price. Many people with families aren't going to want a tiny electric car for the same prices as a larger gasoline powered SUV, crossover or Minivan. New electric cars will also be competing with much cheaper used vehicles for a while which will again make it difficult to justify the cost of buying a new electric car.

On the second, Europe does take global warming more seriously, but their interest in electric cars has much more to do with them paying $6-$10 a gallon on gas for the last decade and above 4 prior to that. If their gasoline prices drop like ours have, it will hurt their electric car demand as well.

Electric cars will get the market share eventually, I just don't think it will happen anywhere that quickly.

High fuel prices in Europe and much of the world are much more due to taxes than the price of oil, and that's not changing.