Path Home Shows 2014 Show Archive September 2014 Show 1438 Oklahoma Horizon TV Show 1438

Oklahoma Horizon TV Show 1438

This week on Oklahoma Horizon, we examine the role Oklahoma exports play in the state’s economy.
Oklahoma Horizon TV Show 1438

Oklahoma Horizon TV Show 1438

For more information visit these links:

Oklahoma Department of Commerce

Frontier Electronic Systems

Oklahoma Manufacturing Alliance - ExporTech

State Chamber of Oklahoma

Mills Machine Company Inc.

Meridian Technology Center

Wilco Manufacturing

Tulsa Port of Catoosa

Horseshoe Road

Show Details

Show 1438: Oklahoma Horizon TV
Air Date: September 21, 2014

 

Transcript

Rob McClendon: Here’s what’s coming up on your “Horizon.” So what do you have when 10 people sit down at a poker table with $10 a piece? Well, at the end of the night, no matter who has won or lost, there is still going to be just $100, no matter how you pass it back and forth. And that is the analogy that is often used when we talk about the importance of exports in our economy and how we just get more money onto the table. Today, our focus is on international trade and its impact on your pocketbook. Stay with us for “Oklahoma Horizon.”

Male Announcer: “Oklahoma Horizon” is made possible by the Oklahoma Department of Career and Technology Education.

Female Announcer: Oklahoma’s investment in CareerTech provides more than nationally recognized technology education and training. It produces solid financial returns for the state’s economic future. Oklahoma CareerTech, elevating our economy.

Male Announcer: And the Oklahoma Department of Agriculture, Food and Forestry, helping good people grow good things. And now, from the CareerTech studios in Stillwater, here’s your host, Rob McClendon.

Rob McClendon: Hello, everyone. Thanks for joining us here on “Horizon.” Well, for Oklahoma companies the decision to export or not really comes down to some simple math. When measured by population Oklahoma is a relatively small state. At 3.8 million, we make up just over 1 percent of the U.S. population of 323 million. But it’s when you look at the number of people around the globe, 7.2 billion and quickly growing, it’s easy to see the importance of exports. There is just more of them than there are of us. And while we may only make up a tiny fraction of the world’s population, Oklahoma’s economic impact is much larger.

Rob McClendon: Last year Oklahoma exports hit a record $6.9 billion. And just where are they heading? Well, in great part, up north.

Deidre Myers: The top country for our exports is definitely Canada. They comprise almost 30 percent of our exports. And of course that’s very oriented towards energy. The plays up in the middle section of Canada and western Canada are very important to our pumps and valve exports.

Rob: Deidre Myers is with Oklahoma’s Department of Commerce and says with exports of 1.9 billion last year, Canada is far and away our largest trading partner followed by Mexico, China, Japan and Germany. Yet it was exports to Egypt that grew the most last year, with sales up 191 percent. Other growing markets for Oklahoma’s goods and products are Russia, Israel, Saudi Arabia and, once again, Germany. And the top categories for export, well, they include machinery, transportation equipment and fabricated metal products, often for the energy or aerospace sector. Brenda Rolls is the president and CEO of Frontier Electronic Systems.

Brenda Rolls: One of the things about a company like Frontier in Oklahoma is most of our customers are not local, so we’re bringing in revenue dollars from outside the state.

Rob: Agricultural exports also are setting a record pace. The latest numbers show about 1.9 billion in international sales, a growth that’s spurred by an expanding middle class in the developing world, hungry for high-quality, American-grown products. In fact growth in exports of food and autos helped the U.S. trade deficit narrow in July to its lowest point in six months as exports rose to a record high.

Rob McClendon: Yet, only 1 percent of U.S. companies export, while 95 percent of the world's consumers live outside the borders of the United States, something that one group in Oklahoma is wanting to change. Joining me now is our Courtney Maye.

Courtney Maye: A program called ExporTech is helping companies enter or expand in global markets by assisting in the development of a customized international growth plan that is vetted by experts who have been there and done that.

Courtney: In the heart of America, Oklahoma hardly seems likely to become a national leader in exports. But Chuck Mills, business owner and chairman of the State Chamber of Oklahoma, says otherwise.

Chuck Mills: We’re actually kind of a little shining star in the United States. Our exports grew, where other states actually shrank.

Courtney: Thanks in part to a program called ExporTech, which connects the dots between exporting resources and local companies. Ron Duggins is with Meridian Technology Center and says exporting internationally can bring big opportunities.

Ron Duggins: The sheer number of customers that are overseas -- and you see different statistics -- but you might see 80 to 90 percent of the actual market for your product. While it may be big in the U.S., it could be that 80 percent of the actual available sales are overseas.

Courtney: And with every product leaving Oklahoma, money is flowing in.

Duggins: It is the companies that are accessing foreign markets that are stronger companies. They hire more people, and they pay on average 15 percent more than companies that don’t export. So when we have companies that are taking the products made in Oklahoma overseas, those companies generally have a higher impact for our local economic development.

Courtney: Chuck Prucha from the Oklahoma Manufacturing Alliance says exporting opportunities are endless.

Chuck Prucha: It gives you just a really good opportunity to travel. You know, every, every small entrepreneur would like the opportunity to go to a foreign country or learn something about the foreign company. And this really offers you some great opportunities to get out and see the world and be a part of the world.

Courtney: Understanding cultural differences and identifying the best foreign market for their business.

Duggins: One must understand, really, the background. You may not understand the language always, but the place that those individuals are coming from. Why are they buying your products? They may have a different motivation than our U.S.-based customers, so understanding that cultural aspect is really important.

Courtney: And while international exporting may appear a daunting task for small business owners, Mills says ExporTech makes it easy.

Mills: There are a lot of people here that will uh, that will help -- the Oklahoma Department of Commerce, the U.S. Export Assistance Center, SBA. There’s just a myriad of resources here that are free or inexpensive, and there’s no reason to be afraid. It’s really not that hard.

Courtney: And with a relatively weak dollar and rapid growth in many emerging economies export sales are the fastest growing segment of the U.S. market.

Rob: So, Courtney, how hard is it to go from a local level to maybe working on the global stage?

Courtney: Well, according to leader of the ExporTech program, he says although businesses may not recognize it, they are already competing with international companies because exports and imports are a two-way street.

Rob: Well, all right. Thank you so much, Courtney.

Courtney: You’re welcome, Rob.

Rob: Now, we do have contact information for the ExporTech program listed under the story that is streaming at okhorizon.com. When we return, an exporting success story.

Male Announcer: You’re watching “Oklahoma Horizon,” featuring some of the good things that are happening in the great state of Oklahoma.

Rob McClendon: Well, Oklahoma exports hit a record high last year, thanks in large part to the high concentration of energy-related manufacturers here in the state. Our Andy Barth headed to Duncan, Okla., to visit a small town manufacturer with a global focus.

Andy Barth: As sparks fly and iron clanks, Wilco Manufacturing is hard at work to keep up with its strong demand.

Brad Boles: We’re the largest employer. We employ close to 400 employees in a town of 4,500 people.

Andy: Brad Boles is the president of Wilco Manufacturing and says his family’s business is booming.

Brad: We went from a more domestic company to now we’re a global company. In 2009, Wilco won the Oklahoma Governor’s Export Award. We’ve exported actually 50 percent of our sales. Either directly or indirectly, we’re exported internationally.

Andy: And although he’s president of the company, Brad is the third generation of Boles gentlemen to run the business.

Chris Boles: I’ve been to several countries setting up some other shops to assist us in our overseas operations.

Andy: Chris Boles is Brad’s father and the second generation in the Wilco dynasty. Chris’ job entails heading up the international division.

Chris: I just got back from Africa. Had a business in South Africa that was building some tanks for us that are going to be shipped to Angola to do a bulk plant. I’ve been overseeing that a little bit and trying to get everything ready to go to Angola.

Andy: But the man responsible for big business in a tiny town is Wilco founder Pete Boles.

Pete Boles: It’s a good feeling to see my son and my grandson take it and go on, and it’s been a good thing. It makes your head get big sometimes, but then you go back to reality. It’s been good, been great.

Andy: And Wilco’s top priority -- its customers.

Brad: We take care of our customers. You know, even if it means us losing on the job. Even if that means we’ve got to work 24 hours a day. You know, at the end of the day we realize that without the customers, you know, we don’t have any work.

Andy: Supplying the world and employing our state all from small town America.

Rob McClendon: Well, while oilfield equipment exports are booming, exports of crude oil are pretty well stagnant. That’s because when oil supplies ran short during the energy crisis of the 1970s, Congress responded by banning most exports of U.S. crude oil. Today, though, domestic oil production is booming, and many in the industry are asking for the ban to be lifted. At this year’s Governor’s Energy Conference, I sat down with the keynote speaker Jamie Webster to talk about whether lifting the ban could bring back the bad old days of shortages and paying more at the pump.

Jamie Webster: Well, we do export crude oil, but we just don’t export it freely. So we export around 250 to 300,000 barrels a day up to Canada, which is allowed by law. But what we don’t do is export it freely around the world as we do with petroleum products. So one is Nigeria. We now provide about 30 to 40 percent Nigerian petroleum products, but we’re not allowed to export oil there, and that is because of some policies that were put in place back in the ’70s as part of the price control program that was then put in place for the country at that time. And of course to have a price control policy you need to have kind of a closed system, so allowing oil to go could end up messing up that price control policy.

Rob: Now, this was a law put into place in the 1970s. What has that meant for us now that we’re into the second decade of the 2000s?

Webster: Sure. So that actually really hasn’t mattered a whole lot. Like, it hasn’t been -- really if the law had not been in place you probably wouldn’t have seen a big change in exports over the last couple of decades. With one exception, which is that last -- the last quarter of the year of 2013 you probably would have seen us exporting 200 to 300,000 barrels a day of oil out of the Gulf Coast into markets around the world. The reason for that is because the big boom in production that we’ve seen in the United States finally kind of hit its, uh, its point where it was really kind of impacting the refining sector where the refiners really needed to, uh, to reduce and provide and give discounts before they were willing to take in the light sweet oil that we were producing in the United States.

Rob: Now, I’d have to believe that this would be good for the energy industry. What would it mean for consumers?

Webster: So if we allowed crude oil exports, you would actually, our estimate is that you would actually see probably not much but about an 8-cent decline in gasoline prices – all of the things being equal.

Rob: And how is that with just the laws of supply and demand?

Webster: So the way that would work and why it doesn’t work right now is by allowing crude oil exports, it allows U.S. producers to receive full value for their crude. So they would get international prices. They get full value for their crude. They’re getting more money for their crude, so they end up producing more because, of course, more projects make more sense at that time. So that ends up increasing total global supply. So as you push that crude out into the world that increases total supply, that brings down the Brent Price, which is kind of the global marker that is up in the North Sea of Europe. And that is really what is mostly tied to global gasoline prices. So you’ll actually see global gasoline prices go down around 8 cents for the U.S. but also places like Singapore and other places that have free markets. So it will be a very good benefit not just for U.S. consumers but for the globe.

Rob: Jamie Webster, thank you for your insights.

Webster: My pleasure. Thank you.

Female Announcer: Still to come on “Oklahoma Horizon,” exporting Oklahoma culture, but first, Oklahoma’s Port of Catoosa.

Rob McClendon: Well, exporting is not only good for Oklahoma industry but Oklahoma workers. On average companies that export pay higher wages than state averages. Bob Portis heads Oklahoma’s Port of Catoosa and says they are in constant need of a skilled workforce.

Bob Portis: This is primarily what I’ll call blue collar country. A lot of fabricators, a lot of machinists, a lot of welders, hence the reason I call it blue collar kind of work. The beautiful thing about that kind of skills and those kind of workers is they’re value-added. It’s a value-added industry that’s so important for our state.

Rob McClendon: And our Alisa Hines recently visited the port and joins me now.

Alisa Hines: Normally, when we’re talking about water and agriculture, we talk about rain or drought, but there is another water that affects agriculture in Oklahoma, and it’s our waterways.

Alisa: Agriculture products go by truck – go further by train – but they go the farthest by water – primarily the McClellan-Kerr Waterway.

Jim Reese: Oklahoma grows $7 billion worth of ag products every year.

Alisa: Jim Reese is Oklahoma’s secretary of agriculture and says without the navigational system it would be impossible to get ag products overseas.

Reese: We use railroad, we use truck, but there’s not a railroad or truck that goes to our third largest trading partner, which is China. And so to get our grain to Asia, to Russia, to Japan, all of those outside foreign markets we have to go by water. You can’t take ’em by plane -- they’re too heavy, they’re too bulky -- and so water is the direct route. We use train, we use truck to get ’em here but the ultimate goal is to get ’em on the water and get ’em over to, for sale.

Alisa: According to Eric Kresin of Consolidated Grain and Barge, the waterway helps keep production costs low for ag producers.

Eric Kresin: McClellan-Kerr is important to Consolidated Grain and Barge for a couple of reasons. One, customers that we have all across the world that want to buy Oklahoma wheat come to the McClellan-Kerr, come to CGB, and say, “We want to buy your wheat.” And so the wheat is bought from the producers here in Oklahoma, shipped on this river system down to the Gulf of Mexico and then put on vessels that will either go to Central America, where there’s a lot of -- where our wheat has gone -- where they’ll grind and mill the wheat for bread products there. So without this river system, the producers in Oklahoma would not have a price competitive advantage to be growing and shipping wheat to the river. They might have to ship it to maybe Houston, Texas, or another wheat mill. So this is actually a price advantage for the grain.

Alisa: And it wouldn’t be possible without the United States’ farthest inland port, the Port of Catoosa. Port director Bob Portiss.

Bob Portiss: Agriculture has from day one, going back to 1973 when we built this grain elevator, has been one of the driving forces together with energy that’s made this port work, OK? Back in1973, we had everything coming in, and we had all these empty barges and nothing going out. So that was one of the impetuses if you will to build a grain elevator. The other thing was we opened up the farmers in Oklahoma and Kansas to the spring wheat market of New Orleans. Never before had we had access to that market.

Alisa: There definitely aren’t any empty barges now.

Portiss: So by 1976 we were moving 20 million bushels of grain through here. Unbelievable! And today, it’s not unusual in a good grain crop year to see our ports and our brethren downstream and ourselves move collectively a total of around 40 billion bushels. Isn’t that fantastic? So why does that happen? Is it just because of the New Orleans market? No, it’s the economics of barge transportation. You can put 60 truck loads of grain in a single barge – not unusual for us to move 12 barges at a time along this waterway out of this port. So think about that -- 60 times 12, 720 truck loads being pushed by a towboat that is 2,500 horsepower and a crew of eight. So, therefore -- a good friend of mine in Enid, Okla., by the name of Lew Meibergen loves to say we can move three bushels of grain to the Gulf by barge cheaper than you can buy a first-class postage stamp. But it just kind of illustrates the importance of the port to ag and ag to the port and to this waterway primarily and the history of this waterway. And as far as the future is concerned, in my opinion – Katie, bar the door.

Alisa: Tom Buchanan is president of Oklahoma Farm Bureau and says it’s imperative to have a facility like the port.

Tom Buchanan: It certainly gives us an opportunity to capture an additional price point so to speak on sale of commodity. But additionally the inputs that are brought upriver help us as we’re buying fertilizers and even steel to go back to the farm with. So this is a very integral part of modern production agriculture in Oklahoma.

Alisa: Now, Bob pointed out that when you use waterways, while you still have to truck the shipments to and from the port, most of those trips are day trips for truckers, making it where they can be home in the evenings with their families.

Rob: Now, I know when you went to cover this story there was a concern about a proposed ruling from the EPA concerning our waterways.

Alisa: The concern is about the word “nexus.” And what that word means is any stream or even a ditch that connects in some way to a navigable waterway could be listed as a navigable waterway, too, even if it doesn’t usually have water in it like many streambeds in Oklahoma.

Rob: So what’s happened since you were in Catoosa?

Alisa: Last week the House of Representatives passed the Waters of the United States Regulatory Overreach Protection Act. This legislation prohibits the Environmental Protection Agency and the Army Corps of Engineers from finalizing and enforcing a proposed rule that would redefine waters of the United States under the Clean Water Act or using the rule as a basis for future administrative actions saying it is the authority of Congress, not the administration, to change the scope of the Clean Water Act.

Rob: So what happens now?

Alisa: Well, like any piece of federal legislation it now goes over to the Senate where it’s unclear whether the House measure will even be brought to a vote by the Senate majority leader.

Rob: All right. Thank you so much, Alisa.

Alisa: You’re welcome, Rob.

Rob: Now, if you would like to learn more about McClellan-Kerr waterway that makes the Port of Catoosa possible, we have links to a video history of it streaming on our website at okhorizon.com.

Rob McClendon: Want to share something you’ve seen here today? Well, all of our episodes are streaming on our YouTube channel at OklahomaHorizonTV, or you can subscribe to our weekly free podcast on iTunes.

Rob McClendon: Well, in many ways, music is a universal language. In this week’s Oklahoma Standard, we recognize a musical group who’s exporting our culture by serving as musical ambassadors for Oklahoma and now the nation.

[Music].

Alisa Hines: Take a little fiddle [music], add some base [music], throw in some guitar, and what you have is foot-stomping music by Oklahoma’s own Horseshoe Road. Kyle Dillingham is a world-renowned fiddle player and leader of the band and says their music enables them to be ambassadors to the people of the world.

Kyle Dillingham: Using musical diplomacy is very powerful because music already naturally brings people together. And it’s just going one step further to say, while we have the people assembled and they’re all feeling good, what kind of message are we going to convey? And so it’s very natural and for all of us to say, to just connect them to the United States, connect them to Oklahoma.

Alisa: So as part of the American Music Abroad program, Kyle and bandmates Peter Markes and Brent Saulsbury tour different countries performing in each location, like they are on this night, with a local orchestra, which Brent says is pretty amazing.

Brent Saulsbury: For me personally, that’s probably the closest to being a rock star I’ve ever been. I’ve never had so many pictures taken, had so many autographs asked to be signed in my whole life. So everywhere we went we were met with just open arms and, you know, standing ovations. In fact, in Taiwan, one place, I think we counted five standing ovations one night, and it was beyond my wildest expectations.

Alisa: And while playing American-style music may be a different sound to the audience, Peter says music is the same no matter where you are.

Peter Markes: You find that every culture obviously has their roots in some sort of music. When you go that far back to the roots, many music styles have similarities. And so our music, while it may have been brand new to them, the song or the sound they’re hearing, they know our instruments, they’re eager to learn more about it because they, too, have their own cultural music. In just about every country, we were able to play with some sort of specific instrument to that culture, and it was always fun to see how quickly we were able to just make the instruments meld together, make a really intricate sound. Although the harmonies might be very different than what we’re used to hearing, the instruments and our eagerness to learn from each other came together immediately.

Saulsbury: It was a challenge. It was a challenge we met with great enthusiasm. I think it’s one of our great passions, this love to mix with the people of different cultures and the different instruments and give and take in that context, you know.

Dillingham: We’re musicians, and so as Peter was saying earlier, roots – all music – music is music is music, and when you can realize that, you realize we are speaking the same language even though it might be a different dialect. But that, if we just spend the time, it’s great fun for us as musicians to learn new music to expand our vocabulary, so to speak, of expression because when you’re playing music, you’re creating sounds and sounds that have meaning to people. That’s the idea behind music, and when you realize these musicians are creating sounds that are not as familiar to us as a musician you want to grab a hold of those sounds because it gives you that many more tools to connect with that many more people.

Alisa: Music and culture from Oklahoma’s musical ambassadors heard around the world.

Rob: And it is that willingness to spread goodwill through song that makes Kyle Dillingham and Horseshoe Road an Oklahoma Standard.

Next time on “Oklahoma Horizon,” American manufacturing on the rebound and the new jobs that it’s providing.

If you look at any industry, manufacturing is the basis for everything that’s going on in the economy. Everything has to come from somewhere.

Rob: New high-skilled American jobs on Oklahoma’s show for the heartland, “Oklahoma Horizon.”

Well, we are out of time. I’m Rob McClendon. Thanks for watching. See you back here next week.

Male Announcer: “Horizon” is made possible by the Oklahoma Department of Career and Technology Education and the Oklahoma Department of Agriculture, Food and Forestry, helping good people grow good things. Thank you for watching “Oklahoma Horizon.”