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One Industry, One-Third of the State’s Economic Output
The Impact of the Oil and Natural Gas Industry on the State of Oklahoma

CAPTION: Lt. Governor Todd Lamb speaks during press conference in the Blue Room at the State Capitol. Seated behind him from left to right are Oklahoma City University economist Russell Evans, OERB Chairman David House and OIPA Chairman Mike Terry. The panel spoke regarding a recently released economic impact study commissioned by the Oklahoma Energy Resources Board.

As the nation emerges from a severe 18-month recession, Oklahoma’s recovery is on a path envious to many states. With that in mind, the Oklahoma Energy Resource Board released today a newly commissioned study examining the effects of the oil and natural gas industry on the state economy.

The Steven C. Agee Economic Research and Policy Institute at Oklahoma City University conducted the economic study and concluded the oil and natural gas industry remains the cornerstone of the state’s economy.

“The oil and gas industry is still Oklahoma’s number one defining industry,” said Russell Evans, Executive Director of the Institute. “The industry is likely in a continuing boom period – even if modest - relative to pre-recession activity.”

Oklahoma oil and natural gas producers pumped out and marketed 67 million barrels of oil in 2009, or 3.5 percent of total U.S. production. In addition, another 1.85 trillion cubic feet of natural gas was produced in the state, accounting for 8.6 percent of U.S. production. These totals make Oklahoma the sixth largest producer of oil and the third largest producer of natural gas.

The industry has not been immune to the difficulties of the recession. In Oklahoma, it shed 13,000 jobs from October 2008 to 2009, before adding back more than 4,000 since. In total, however, the industry has posted employment growth of 46.2 percent since 2002.

Total job count in the state looks this way: 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.

The production of oil and natural gas provides vital revenue to the state. The tax levied on the industry - the gross production tax - accounts for ten percent or more of total state tax collections each year and varies with the commodities’ prices. Over the last three years, the gross productions tax has averaged nearly $1 billion. Gross production tax is apportioned across several state revenue funds that support county roads, local schools, higher education and general revenue.

“An industry as successful as the oil and natural gas industry helps show Oklahoma is business-friendly,” said Lt. Governor Todd Lamb. “Economic development is the key to a strong Oklahoma. The indirect and induced jobs that the oil and natural gas industry provide are helping rural communities across our state thrive.”

Analysis of the structure of the industry and the state’s economic makeup in 2009 show an industry whose annual operations generate long run impacts to the state of $51.7 billion in Oklahoma goods and services - nearly one-third of Oklahoma’s gross state product.

“In Oklahoma, we understand the importance of the oil and natural gas industry. Those of us who live close to the wellhead understand and depend on the impact this industry has on jobs and the overall economy,” said Mike Terry, Chairman of the Oklahoma Independent Petroleum Association.

OERB Chairman David House echoed this sentiment. He said, “What is important to note today is that this industry remains committed to the state of Oklahoma and growing our industry right here.”

Click here to view the full report on Oklahoma's Oil and Natural Gas Industry: 2011 Economic Impact and Jobs Report

                                         Courtesy newsok.com

Watch more coverage of the OERB Economic Impact Study from local television stations here.


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