The oil and natural gas industry pumped $61 billion into the Oklahoma economy last year, according to a report commissioned by the Oklahoma Energy Resources Board.
“This study is an effort to understand better the impact on jobs and taxes,” OERB Chairman David House said. “Everything that we do has touched so many lives in this state.”
Economist Russell Evans, executive director of Oklahoma City University's Steven C. Agee Economic Research and Policy Institute, said the oil and gas industry helped Oklahoma weather the recession better than most other states.
“Oklahoma continues to be defined by its oil and gas industry,” he said.
Oklahoma Independent Petroleum Association Chairman Bob Sullivan said producers understand the importance of their contribution to the state's economy.
“We know that we are being counted on to produce for Oklahoma,” he said.
Impact on state
The oil and gas industry's input to Oklahoma's economy in 2011 totaled more than $61 billion, or about $1 of every $3 in the gross state product, Evans said. That figure comes from adding the industry's direct and indirect output to the spending of its 344,000 workers in Oklahoma.
“The 2011 impacts are awfully close to being where they were in 2007, pre-recession,” he said.
The 2007 OERB study pegged the industry's impact at $68 billion, but dipped to $51 billion in 2009 because of the recession.
Evans said those figures are driven by drilling activity and employment.
“A lot of the impacts that we enjoy in Oklahoma from the oil and gas industry really revolve around regular, predictable drilling activity,” he said. “We're not quite back to our '07 impact levels, but awful close.”
Evans said the industry has added nearly 12,000 jobs over the past two years, despite significant price challenges with oil and natural gas.
Oklahoma crude is trading at about a 20 percent discount to London's Brent crude due to the glut of oil in storage at Cushing, while natural gas prices have plummeted to near-historic lows.
Oklahoma Treasurer Ken Miller said such price variations illustrate why it is important for the state to support the oil and gas industry.
Miller said about one third of the state's $150 billion economy is tied to the industry, which also contributes about 12 percent of the state's revenue through gross production taxes.
He said that figure jumps to about 27 percent when factoring in the spillover impact from income and sales tax collections from industry employees.
“That doesn't include a lot of other taxes that are affected by the industry as well,” Miller said. “In other words, more than 25 cents out of every dollar spent by Oklahoma state government is provided thanks to the Oklahoma energy industry.
“That translates into better schools for our children, better roads and bridges and better public safety and safe neighborhoods.”
Evans said the oil and gas industry also is helping to diversify the state's labor pool because companies are hiring employees with a greater mix of skills.
“Within the walls of our producers in Oklahoma, the types of employees they require is changing considerably,” he said, noting massive increases in the number of compliance officers, auditors, accountants and network and computer systems administrators working in the industry.
Evans said that demand forces Oklahoma colleges and technology centers to provide training for a more diverse workforce, in turn creating a deeper labor pool for other industries.