Oklahoma's oil and gas remain strong: Industry has 60K direct jobs

Journal Record, The (Oklahoma City), Mar 5, 2007 by Jerry Shottenkirk

The state's oil and gas industry is responsible for about 60,000 direct jobs, or about 3 percent of the total state work force, according to a recently released report on the economic and local impact of oil and gas production and drilling.

The report was prepared by the Center for Applied Economic Research at Oklahoma State University's Center for Applied Economic Research and was done in collaboration with the Marginal Well Commission and the Oklahoma Energy Resources Board.

Oklahoma ranks fifth in the nation in crude oil production (behind Texas, Alaska, California and Louisiana) and is second in natural gas production (behind Texas). The state produces 3.3 percent of the nation's crude and 8.8 percent of the natural gas in the U.S.

In addition to the direct job total, the industry had a hand in 186,000 other jobs, and the direct jobs were lucrative for employees. Through the end of 2005 the wage and salary full-time workers averaged $83,858, and self-employed industry workers averaged $126,000.

The report indicated $1.6 billion in tax revenue was generated by the industry during 2006. Included were gross production tax, personal income tax, corporate income tax, motor vehicle tax and sales and use tax. The oil and gas industry had a $7 billion impact on other industries.

Drilling has shifted heavily in favor of natural gas, the report said. There are four gas wells completed for every one oil well, and drilling has become deeper. The report indicated that a deep well below 15,000 has six times the economic impact of a shallow well.

The future of natural gas production hinges on the market price. Oil production should decline by less than 3 percent. Employment will rise in the near future and then will fluctuate according to gas and oil prices, the report said.

Either oil or gas was produced in 71 of Oklahoma's 77 counties in 2005, and Carter County produced more oil than any other county. Oklahoma County is ranked 10th in crude production.

Roger Mills County was the top gas producer, and Beckham County was the top producer in barrels of oil equivalent.

Roy V. Edwards Jr., executive director of the Marginal Well Commission, said numbers posted in the study help solidify the industry's standing in Oklahoma.

"I think the material and numbers point out how important the industry continues to be to the economy across the board, from counties to districts of the Corporation Commission," Edwards said. "The employment numbers are great and the there's a tremendous amount of tax revenues involved. It says the industry is still pretty strong."

Edwards said the higher prices for oil and gas in the last few years have allowed Oklahomans to maintain smaller volume wells.

"While the (commodity) prices have gone up, the margins are about the same as they were eight years ago when oil was $10 to $12 a barrel," he said. "While the prices have gone up, so have the prices for rigs and about everything involved in production. The margins have been about the same for about 30 years."