OKLAHOMA CITY — Oklahoma’s oil and gas industry provides 300,000 jobs, pays nearly $1 billion in gross production taxes annually and accounts for a third of the state’s economic output, a new study has found.

Lt. Gov. Todd Lamb, R-Edmond, Oklahoma City University economist Russell Evans, Oklahoma Energy Resources Board Chairman David House and Oklahoma Independent Petroleum Association President Mike Terry touted the findings of the OERB economic impact study to determine the effect of exploration and production on the state economy.

They spoke during Wednesday morning’s press conference at the state Capitol.

Edmond has more than a passing interest in the oil and gas industry, with local players like Bronco Drilling Company, which provides contract land drilling services to oil and gas exploration and production companies through the country.

As of April 2011, when Chesapeake Energy Corporation announced an agreement to buy the company for about $315 million, Bronco owned 22 drilling rigs primarily operating in the Williston and Anadarko basins.

Lamb, who worked as a landman in the Oklahoma energy industry, said the gross production tax, which is apportioned across several state revenue funds that support county roads, local schools, higher education and general revenue, has averaged nearly $1 billion during the last three years.

“When I became lieutenant governor I was focused on economic development and moving our economy forward,” Lamb said.

Lamb said polls show the state is business-friendly and economic development is the key to a strong Oklahoma. Oil and gas industry-related jobs are helping rural and urban communities alike, in part by bringing new jobs.

Texas is the leading oil producer, Alaska second, California third, North Dakota fourth, Louisiana fifth and Oklahoma sixth, according to 2009 rankings, part of the study conducted by the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University; Evans is executive director of the institute.

Texas is the leading natural gas producer followed by Wyoming and Oklahoma.

In 2009, Oklahoma’s oil and natural gas industry produced 67 million barrels of oil, 3.5 percent of total U.S. production. Another 1.85 trillion cubic feet of natural gas was produced, accounting for 8.6 percent of U.S. production.

However, statewide oil production declined nearly 8 percent from 1999 levels, according to the study. The western half of Oklahoma continued to dominate the production of oil as the top nine oil producing counties all lie in central to western Oklahoma. Carter County, located in south central Oklahoma, produces more than 10 percent of the statewide total. Oklahoma County was the eighth most productive county in terms of oil production.

Evans said the industry has not been immune to realities related to the recession, but it remains the cornerstone of Oklahoma’s economy. Oil and gas producers are located across the state, and spin-offs are felt in a broad range of occupations, he said.

Additionally, the state’s economy remains heavily influenced by commodity markets.

As an agricultural and energy state, commodity prices directly impact the profitability of Oklahoma farmers and energy producers, according to the study.

Both oil and gas prices rose considerably before the recession, which began in 2008, as a domestic real estate bubble combined with fast growth in developing countries to generate a nearly insatiable demand for energy.

Natural gas has experienced considerably more price volatility, Evans said.

In Oklahoma, the oil and natural gas industry shed about 13,000 jobs during the recession before adding more than 4,000 since, the study found. The biggest job losses came among the self-employed and on the drilling side of the industry, Evans said.

In all, the industry has posted employment growth of 46.2 percent since 2002.

The study found that 71,224 Oklahomans are directly employed by the drilling and production sectors of the oil and natural gas industry. Another 228,115 jobs are supported indirectly by the oil and natural gas industry. In all, those roughly 300,000 jobs generate more than $14 billion in labor income.

Terry said the oil and natural gas industry in Oklahoma faces a number of challenges including the abundance of oil in the storage hub at Cushing caused by imports from Canada and the northern parts of the U.S. and a lack of pipelines headed south to refineries, an oil price imbalance and the Obama administration’s push to impose new taxes and regulations on the industry.

“And all of this has the potential of dramatically reducing drilling activity in our state,” Terry said.

House said Wednesday morning’s event was held in part to educate the public and highlight the value of the oil and natural gas industry to the state.

The OERB recently passed the 11,000-mark in the number of well sites cleaned up at no cost to landowners at a cost of more than $66 million to restore them to their original condition, House said.



marks@edmondsun.com | 341-2121, ext. 108