| New Economic Report Finds Changes in Oil & Natural Gas Industry
A just-released report shows a single industry – oil and natural gas – pumps $61 BILLION into the state economy. In fact, the study shows this industry remains the defining sector in the state, generating one out of every $3 in gross state product.
The Oklahoma Energy Resources Board, on behalf of the oil and natural gas industry, commissioned the economic impact study to determine the effect of exploration and production on the Oklahoma economy. The report was released during a press conference at the state capitol.
This report serves as the third in a series of studies and provides economic impact estimates for activity in 2011. Among the key findings in relation to the 2009 economic impact report are the following:
Russell Evans, executive director of Steven C. Agee Economic
Research & Policy Institute, explains the findings of the research.
• Over the two-year period, the industry added nearly 12,000 jobs, including nearly 4,000 jobs to the self-employed.
• Self-employment labor income grew to levels in 2011 very near their pre-recession peak, providing a statewide average compensation per job of more than $113,000 a year.
• Income growth was strongest in the oil field, reflecting increased drilling activity and increased complexity associated with today’s drilling technique; average income from drilling jobs grew nearly 30% since the recession to more than $65,000 per job.
• 2011 industry activity set off economic impacts of $52 billion in gross state product or one out of every $3 in GSP.
• $28 billion in state personal income is attributed to the industry.
• 344,503 jobs are directly or indirectly related to the industry.
• The industry paid nearly $1 billion in gross production taxes annually
The study shows the oil and natural gas industry is pumping $61 billion into the state economy – very near the pre-recession level in 2007 of $68 billion.
“The 2011 impacts are awfully close to being where they were in 2007, pre-recession,” said Russell Evans, director of the Steven C. Agee Economic Research and Policy Institute and author of the study.
“A lot of the impacts that we enjoy in Oklahoma from the oil and gas industry really revolve around regular, predictable drilling activity,” Evans said. “We're not quite back to our '07 impact levels, but awfully close.”
Oklahoma’s oil and natural gas industry has helped the state emerge from the recession better off than many states in the country.
“More than 25 cents out of every dollar spent by Oklahoma’s state government is provided thanks to the Oklahoma energy industry. That translates into better schools for our children, better roads and bridges and better health and safety for our citizens,” said State Treasurer Ken Miller. “We can’t take this sector for granted.”
The gross production tax on oil and natural gas accounts for 12 percent of all state tax collections. When income Oklahoma State Treasurer Ken Miller talks about the financial impacts the oil and
natural gas industry has on the state of Oklahoma.
“Without the energy industry, Oklahoma would not have one of the lowest unemployment rates in the nation at 5.4%, almost 3% below the national average, the second highest job growth in the nation and the fourth highest per capita income growth in the United States,” said Miller.
Because the energy industry is Oklahoma’s defining industry, its growth demands the expansion of a broad employee base with diverse skill sets.
“Within the walls of our producers in Oklahoma, the types of employees they require is changing considerably,” said Evans.
The study shows producers have increased hiring in the areas of compliance officers, auditors, accountants and network and computer systems administrators. Evans noted not only will this talented, skilled labor force enhance the energy industry, but it will also help diversify the state's labor pool because companies are hiring employees with a greater mix of skills.
Evans said that demand also forces Oklahoma colleges and technology centers to provide training for a more diverse workforce, in turn creating a deeper labor pool for other industries.
“In Oklahoma, we understand the importance of this 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 Bob Sullivan, Chairman of the Oklahoma Independent Petroleum Association. “These numbers represent our friends and neighbors, little league coaches and church deacons, uncles and cousins. State Treasurer Ken Miller takes questions
from the media.
Click here to view the full report: Oklahoma Oil and Natural Gas Industry Economic Impact & Jobs Report, May 2012
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