How Low Natural Gas Prices Could Slow OK’s Growth
The price of natural gas is down — way down, and Oklahoma’s state government is feeling the effects.
Increased supply and a mild winter have curbed gas prices, and collections from natural gas gross production taxes are below expectations, Oklahoma Treasurer Ken Miller said yesterday.
Oklahoma energy companies have already shifted their focus to oil.
“So much of our economy is tied to the energy industry,” Miller said as he released his revenue report for January, the AP reports. “That has to be a cause for concern.”
While gross production taxes only comprise about 10 percent of the state’s budget, declining collections could mean less revenue available for appropriations.
The Board of Equalization meets Feb. 21 to certify the amount of money lawmakers will have to spend on the FY 2013 budget.
The last estimation, in December, projected a $150 million shortfall. But general revenue collections were about 5.7 percent higher than expected, and Finance Director Preston Doerflinger was optimistic that the trend would continue through February and help fill the gap.
“Now, the discussion is ‘maybe not,'” Miller said, reports the Tulsa World’s Barbara Hoberock.
The World on the role of gas prices in December’s rosy outlook:
The December preliminary estimate was based on natural gas at $4 per thousand cubic feet, but prices are in the $2.50 range this week with little improvement anticipated in fiscal 2013, Miller said.
Also, in December, Oklahoma State University economist and professor Dan Rickman warned in an economic forecast that the expansion of Oklahoma’s economy could be restrained by the price of natural gas and oil.