Rising rig count lifts Oklahoma economy
By Brook A. Simmons
Oklahoma’s rig count hit 60 last week, marking the highest number of active rigs the Sooner State has seen since October of 2019.
For an industry still recovering from losses incurred during the COVID-19 pandemic, the rise in rigs on the Oklahoma horizon is welcome news. And for a state that is dependent on the oil and natural gas industry, increased activity in Oklahoma’s historic oilfields offers increased hope for a growing and vibrant economy.
In 2021, PricewaterhouseCoopers (PwC) compiled data for all energy-producing states in the nation, highlighting the economic contributions by the oil and natural gas industry. The PwC study used data from 2019, and as the industry returns to 2019 levels, that same study serves as a crystal ball for the economic fortunes waiting for Oklahoma.
According to the study, in 2019 the industry:
- Supported 389,800 total jobs (134,200 direct and 255,600 indirect) or 16.7 percent of Oklahoma’s total employment.
- Generated an additional 1.9 jobs elsewhere in Oklahoma’s economy for each direct job in the state’s natural gas and oil industry.
- Provided $32.8 billion ($19.4 billion direct and $13.4 billion indirect) in labor income to Oklahoma, or 25.3 percent, to the state’s total.
- Contributed $57.7 billion to Oklahoma’s gross domestic product ($37.0 billion direct and $20.7 billion indirect), 28.5 percent of the state’s total.
All of these numbers combined show that when rigs are up in Oklahoma, the economy follows suit. Oklahoma is an oil and gas state. The industry provides half of the state’s non-farm employment earnings, giving working Oklahomans greater opportunity to support their families. The state relies on the taxes generated from a growing and vibrant oil and gas industry to fund core services that benefit all Oklahomans, with 25 percent of the state’s tax collections tied to the oil and natural gas industry.
And the nation relies on us as well. As the nation’s sixth-largest producer of crude oil and the fourth-largest producer of natural gas, Oklahoma plays a key role in providing all Americans with the affordable energy they need to power their everyday lives.
There is still much recovery needed to return our state to the levels of oil and gas activity seen prior to the pandemic and to meet the needs of American consumers desperate for affordable and reliable energy, but we are on our way.
— Brook A. Simmons is president of The Petroleum Alliance of Oklahoma