Oil and gas industry more critical to Oklahoma now than ever
OIPA-OKOGA President Chad Warmington empowered the crowd at the Tulsa Wildcatter Wednesday Luncheon on Feb. 6 with facts they can take to the community to spread the word about the importance of Oklahoma’s oil and natural gas industry.
“What you’re going to see with a combined OIPA and OKOGA is a renewed focus on making sure Oklahoma is the best place to do business that we can possibly make it,” Warmington said.
He outlined the oil and natural gas industry’s critical role in Oklahoma:
• 1 in 5 jobs in the state
• More than 25 percent of all taxes paid in the state
• An average wage over $94,000
• $225 million in gross production taxes going to education funding alone in FY18
• Well over $2 billion contributed to education over the past decade just from the gross production tax.
And a recent study found that of all the 16 major oil- and gas-producing states, Oklahoma is the most sensitive to commodity prices.
“This industry’s role has never been more critical,” Warmington said. “As goes the oil and gas industry, so goes the Oklahoma economy.”
And the role of the industry has a significant positive impact across the country:
• Growth in oil and gas employment outpaces the rest of the U.S. economy
• The cost of energy has dramatically fallen
• The U.S. likely surpassed Russia and Saudi Arabia to become the world's largest crude oil producer earlier this year
• Air quality has consistently improved, as production has increased.
Moving forward, Warmington said, the industry’s goals are to be good neighbors, to support a strong education system and to secure a fair and stable operating environment.
He targeted the false narrative that education and energy are at odds.
“Nothing could be further from the truth,” he said. “That has been perpetuated by people who aren’t going to be for us no matter what. In reality, there’s probably no industry that depends on education as much as this one. Those STEM students are the people who are filling this room and are in oil and gas buildings all across the state coming up with the science, the technology, the engineering and the math that’s going to make this industry even better than it is.”
Education funding from taxes on the oil and gas industry outside the gross production tax totaled more than $467 million in 2018, pushing the industry’s tax contribution to education close to $700 million for the year.
One perhaps dubious positive is that, after $600 million in tax hikes over the past three years, Oklahoma has one of the cleanest oil and gas tax codes in the entire country — 5 percent for the first 36 months, 7 percent for the life of the well — with no incentives, credits or rebates.
“Everybody always says that Texas has a higher tax rate, but they never bring up all the deductions and credits companies can get in Texas,” he said.
Warmington said the state's path to prosperity lies in creating a fair and stable operating environment that attracts investment.