Oklahoma oil production has nearly doubled and natural gas production has increased almost 50 percent since 2010, a new study finds.
Fred Morgan, president and CEO of the State Chamber of Oklahoma, said the RegionTrack report is intended to be a benchmark research document for state policymakers.
“This study clearly shows the importance of the oil and gas industry to the state in a way everyone can understand,” Morgan said.
Study author Mark Snead, an economist and RegionTrack president, said forming tax policy is challenging in an energy-producing state. The 2014 Legislature begins Feb. 3.
“My belief is that this report will help them better understand the complex linkages between state tax policy, the oil and gas industry and the state economy,” Snead said.
Oklahoma is the only major energy-producing state to experience a sharp rebound in both crude oil and natural gas production in recent years, according to the report.
Snead attributed local industry growth to factors including: State tax policy; modern seismic imaging technology; advances in horizontal and directional drilling; and new production techniques in shale and tight formations including hydraulic fracturing, also known as fracking.
Overseas capital is also entering these markets as international firms seek to gain a foothold in unconventional fields, the report stated.
Regarding the state’s oil and gas industry, the report found:
• Oil and gas firms account for only 3.2 percent of all business establishments but hire 5 percent of wage and salary workers, produce 10 percent of state GDP and generate 13.5 percent of total earnings statewide;
• Between 2002 and 2012, Oklahoma oil and gas firms created 29,000 new wage and salary jobs while all other private industries combined added only 56,000;
• Oil and gas drilling is the largest source of private capital spending in the state;
• The oil and gas industry is the largest source of state tax revenue in the state;
• More than 118,000 new residents relocated to Oklahoma between 2002 and 2012, more than three times the rate experienced from 1991 to 2001. Recent state population growth exceeded 1 percent annually for the first time since the early 1980s;
• Strong earnings gains in the oil and gas industry have propelled Oklahoma per capita income to 96 percent of the U.S. level;
• Oklahoma is home to the second-largest concentration of oil and gas activity in the U.S. More rigs are currently drilling in Oklahoma (176) than all states but Texas (821), with North Dakota (163) a close third. No other state has half the amount of rigs deployed in Oklahoma; and
• Since 1965, Oklahoma has added roughly 20 percent more jobs than the average of the non-energy producing states.
The Fraser Institute’s 2012 global study of oil and gas markets recently named Oklahoma as the best spot for oil and gas investment worldwide. But the state faces competition from Texas, New Mexico, Kansas, North Dakota, Mississippi, Pennsylvania and Arkansas.
Future industry advances are also likely in the areas of water use, reclamation and disposal, energy efficiency and emission reduction in production, multi-well pad drilling and alternative fracturing techniques, the report stated.
Visit okstatechamber.com to view the full report.
Marks@edmondsun.com | 341-2121, ext. 108