Oklahoma’s oil and natural gas industry is capitalizing on the state’s unique geology and technological advances to hold on to long-term gains in both state Gross State Product (GSP) and jobs despite the recent market lows.
According to a new economic impact study prepared by Dr. Russell Evans, with The Steven C. Agee Economic Research and Policy Institute, the oil and natural gas industry still supports 21 percent of the state’s economy or $1 out of every $5 dollars of economic activity. That’s nearly a quarter of Oklahoma’s economy even at current cycle lows, meaning much of the gains made by the industry over the past several years remain with the state.
In addition, 1 in 6 jobs in Oklahoma are supported by the oil and natural gas industry. In reality, this number is even higher as the direct jobs estimate does not include construction, manufacturing and refining jobs which are common in the midstream and downstream sectors. However, even without including those jobs, Oklahoma’s oil and natural gas industry employed 114,762 full and part-time employees in 2016 with $20.4 billion in state value added.
In 2016, the oil and natural gas industry paid $320 million in gross production taxes. A large part of this money is directly apportioned back to the areas in which the production occurred. This has a major impact on supporting county roads and bridges and local school districts. While this number is significant, it is expected to rise next year. Evans anticipates that both the industry and state economy will continue to improve and will be in better condition by the end of the 2017. In fact, current levels of activity in the oil and natural gas sector are up nearly 12% from the low established in May 2016.
Not only does Oklahoma’s oil and natural gas industry have reason to be optimistic now, but well into the future. The state is well positioned as the technological hub of the oil and natural gas industry while also boasting unique formations, particularly in the SCOOP and STACK plays, which will allow further development and testing of new processes.
This technological revolution has already led to huge advances in making the industry more efficient and cost-effective while also leaving a smaller environmental impact. Crude oil production increased by more than 85 million barrels from 2009 to 2016, representing a 131% increase over that time period. This serves as a reminder that even in the midst of a downturn, the oil and natural gas industry is still an important contributor to the state’s economy.
Click below to view the full 2017 Economic Impact & Jobs Report: