Oklahoma’s oil and natural gas industry is showing new signs of strength.
Economist Dr. Russell Evans who compiles the Oklahoma Energy Index (OEI) said all signs point to a recovery of Oklahoma’s oil and natural gas industry that is “picking up steam.” Industry activity expanded at a 3.9% pace in September followed by a 4.7% gain in October. Hiring is picking up, with the industry estimated to have added more than 2,000 payroll jobs since the summer. Rig activity is improving with a weekly average rig count of 42 in October, up from just 28 in June.
Data from the most recent Oklahoma Energy Index helped move the Index 4.7% higher for the month and is now up 39.1% for the year. The Energy Index now stands at 111.5.
“Oklahoma’s defining industry is again making strong contributions to the state’s economic health,” said Evans, director of the Steven C. Agee Economic Research and Policy Institute. “But not to be lost in the story of recovery is the reality that the industry is far from its recent periods of strength. Production, employment, and rig activity are far below levels generally representative of full industry operations.”
Petroleum Alliance President Brook A. Simmons said the ability of Oklahoma’s oil and natural gas companies to weather a historic industry downturn in the wake of a pandemic has the state positioned to reap the benefits when worldwide economies return to full strength. Predictions from the U.S. Energy Information Administration now forecast demand for oil and natural gas will reach pre-pandemic levels by the close of 2022.
Simmons said a strengthening and stable oil and natural gas industry is key to the economic success of Oklahoma. As the state’s defining industry, the ups and downs of the energy industry carry the state economy with it. More than 300,000 Oklahoma jobs are tied to the state’s oil and natural gas industry, accounting for $32.7 billion in wages and more than $57 billion to the state’s economy. The industry is also the state’s single largest taxpayer, making up 25% of all tax dollars taken in by the state to fund education, infrastructure, healthcare and other core government services.
“Oklahoma has been and always will be an oil and gas state,” Simmons said. “Our economy is dependent on a healthy and vibrant energy industry. The industry has begun a slow and steady march back to pre-pandemic levels. That is good news for all Oklahomans.”
The OEI is a comprehensive measure of the state’s oil and natural gas economy established to track industry growth rates and cycles in one of the country’s most active energy-producing states. The OEI is a joint project of The Petroleum Alliance of Oklahoma and the Steven C. Agee Economic Research and Policy Institute.