{"id":3743,"date":"2012-01-19T09:00:30","date_gmt":"2012-01-19T15:00:30","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=3743"},"modified":"2012-12-19T15:02:49","modified_gmt":"2012-12-19T21:02:49","slug":"oil-gas-and-what-a-boom-means-to-big-energy-oklahoma","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2012\/01\/19\/oil-gas-and-what-a-boom-means-to-big-energy-oklahoma\/","title":{"rendered":"Oil, Gas and What a ‘Boom’ Means to Big-Energy Oklahoma"},"content":{"rendered":"
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Cali2Okie \/ Flickr<\/p>\n

Oklahoma is a leading energy producer with an economy increasingly concentrated on the oil and gas industry, economists say.<\/p>\n<\/div>

Oklahoma\u2019s unemployment rate is well below the national average, and it\u2019s among those adding jobs<\/a> the fastest.<\/p>

Oklahoma is as much an energy state today as perhaps it\u2019s ever been, according to one economist, and finance officials agree that revenues from oil and natural gas have helped shelter the state from the worst of the recession.<\/p>

\u201cBooms\u201d are subjective things, but Oklahoma\u2019s energy industry is definitely booming.<\/p>

But does a boom beget a bust?<\/p>

During much of the recent recession, Oklahoma\u2019s energy graphs were up. Oil and gas production increased, and total well count completions were at a high point when the worst of the recession struck in December 2007, Oklahoma Corporation Commission data show.<\/p>\n

Completed Oil and Gas Wells in Oklahoma from 2001-2010<\/h4>\n
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Source: Oklahoma Corporation Commission<\/p>\n

The number of completed oil and natural gas wells remained high during the worst of the recession, the shaded portion of the graph.<\/p>\n<\/div>

Revenues from gross production taxes on oil and natural gas have boosted the general fund, and lawmakers are optimistic about a flat state budget this year, an enviable post-recession scenario to be sure.<\/p>

Oil revenues have been a \u201cbonanza<\/a>\u201d for Oklahoma, Preston Doerflinger, director of the Office of State Finance said last month.<\/p>

\u201cWe are at a period of time where our economy is as concentrated on the energy industry as it\u2019s really ever been,\u201d said Mickey Hepner, an economist and Dean of the University of Central Oklahoma\u2019s College of Business Administration.<\/p>

Roughly a quarter of all jobs in Oklahoma are tied \u2014 either directly or indirectly \u2014 with the energy industry, said Hepner, citing figures from the Bureau of Labor Statistics. When the jobs numbers are taken with the recent growth of big Oklahoma-based energy companies like Chesapeake Energy and Devon Energy, \u201cthat does indicate that, perhaps, we are in a boom,\u201d Hepner said.<\/p>\n

The B-Word<\/h3>

Oklahoma has a long history with oil \u2014 one that predates its statehood \u2014 but much of the recent economic activity centers on natural gas, Hepner said. The growth is largely fueled by supply, he said, specifically new drilling technologies like horizontal drilling and hydraulic frac\u00adtur\u00ading or \u201cfrack\u00ading,\u201d which allows drillers to efficiently extract untapped gas.<\/p>\n

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Spencer Platt \/ Getty Images<\/p>\n

Abram Loeb, who opposes hydraulic fracturing, wears a gas mask during the last of four public hearings on proposed regulations in upstate New York<\/p>\n<\/div>

But a\u00a0hydraulic fracturing boom brings a lot of baggage.<\/p>

The natural gas industry says it\u2019s safe, but a growing consortium of environmental activists and scientists are concerned about contamination from\u00a0hydraulic fracturing chemicals and wastewater. And some say the process might cause earthquakes<\/a>.<\/p>

Whether or not the claims prove true, Oklahoma\u2019s economy is concentrated on a commodity that\u2019s under a lot of scrutiny.<\/p>

\u201cIt does raise a concern,\u201d Hepner said. \u201cIf there is a change in that industry, Oklahoma is exposed to it.\u201d<\/p>\n

‘Fracking’ Frenzy<\/h3>

Oklahomans benefit from direct tax revenues from oil and natural gas drilling operations within the state, but Oklahoma\u2019s economy also benefits from energy operations in other states by way of profits \u2014 and jobs \u2014 for big Oklahoma companies like Chesapeake and Devon.<\/p>

Environmental concerns over\u00a0hydraulic fracturing have become a frenzy in Pennsylvania<\/a>, Texas<\/a> and other states where Oklahoma companies drill.<\/p>

\u201cIf there is a big environmental backlash against (hydraulic fracturing), that could certainly threaten the profitability of natural gas wells,\u201d Hepner said, which would \u201cnegatively impact Oklahoma companies and the state\u2019s economy.\u201d<\/p>\n

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Chip Somodevilla \/ Getty Images<\/p>\n

T. Boone Pickens<\/p>\n<\/div>

On the public perception front, T. Boone Pickens thinks the natural gas industry is effectively belaying environmental concerns.<\/p>

The Oklahoma native, gas and oilman, and billionaire energy investor isn’t an unbiased source on the issue, but his stake \u2014 and exposure \u2014in the energy game, particularly with natural gas, runs parallel to Oklahoma’s.<\/p>

Pickens estimates drillers in Oklahoma, Texas and Kansas have\u00a0hydraulically fractured roughly 800,000 wells since the early 1950s.<\/p>

“I’ve personally fracked over 3,000 wells,” he said in a recent interview from his office at BP Capital, his Dallas-based energy investment firm.<\/p>

Hydraulic fracturing\u00a0hasn’t created water pollution problems in drilling operations in and around Oklahoma, Pickens said. “I never had a problem with it, and I don’t know of anybody else having a problem with it.”<\/p>

In Pennsylvania \u2014 where Pickens has traveled<\/a> to speak as a natural gas booster \u2014 water contamination stems from improperly plugged<\/a> wells.<\/p>

Ironically, it might be energy commodities’ up-and-down nature that evens out the discussion, Pickens said. Natural gas is nearing a 10-year low<\/a>, and he expects conversations to cool a bit on both sides.<\/p>

“Here you are with two-dollar and 80-cent gas, so you’re going to have some rigs that are going to be shutting down. It’s going to give everyone time to catch their breath and get field rules and whatever safeguards they want to feel comfortable with the fracking.”<\/p>\n","protected":false},"excerpt":{"rendered":"

Oklahoma\u2019s unemployment rate is well below the national average, and it\u2019s among those adding jobs the fastest.Oklahoma is as much an energy state today as perhaps it\u2019s ever been, according to one economist, and finance officials agree that revenues from oil and natural gas have helped shelter the state from the worst of the recession.\u201cBooms\u201d […]<\/p>\n","protected":false},"author":36,"featured_media":3744,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[490,301,15],"tags":[271,238,270,178,214,229],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/3743"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/comments?post=3743"}],"version-history":[{"count":3,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/3743\/revisions"}],"predecessor-version":[{"id":3774,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/3743\/revisions\/3774"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media\/3744"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media?parent=3743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/categories?post=3743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/tags?post=3743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}