By Chad Warmington
Anyone who’s lived in Oklahoma any amount of time instinctively knows that the oil and natural gas industry is a big player in the entire economic picture of the state. We know that when the oil business is good, the economy is good. If the oil and natural gas industry struggles, the state’s economy follows suit.
At a time when the state has been rocked by low commodity prices and constant news about how those prices have impacted our economy, it’s great when a new economic report comes out and confirms that we are doing a lot of things right in Oklahoma to keep the oil and gas business as strong as possible.
The State Chamber Research Foundation’s recent 2016 report on the economic impact of the oil and natural gas industry shows just how much the state’s economic fortunes are tied to the industry.
The report is packed with impactful/impressive/outstanding numbers:
- 150,000 jobs in Oklahoma are tied to the oil and gas industry, equal to about 18% of the state’s entire workforce
- $15.6 billion in salaries and wages in 2015 to industry employees
- $1.7 billion paid in royalty payments to Oklahomans in 2015
- Millions of gross production tax dollars dedicated to schools and local governments every year
These are staggering numbers that demonstrate why the oil and natural gas industry is important and why policymakers must make sure the state remains competitive for oil and gas investment.
It’s important to understand that the oil and natural gas industry is every bit as important to those who don’t necessarily collect a paycheck from an oil and gas company, but who benefit financially just the same.
Each new oil and gas job supports two additional jobs in the state. Who are these people? Some work in ancillary jobs that support the industry, such as transportation, real estate, financial services, and more. But others include the person who works at the flower shop, the drycleaner or the restaurant or hotel owner. When the oil business is good, their business is good as well.
The jobs number is even more critical in rural areas, where the oil and natural gas industry supports one in four jobs. The recent report shows that the oil and gas industry spent $28 billion in goods and services in Oklahoma last year. That money spent by the direct and indirect employees of the oil and gas industry is turning over tremendously in communities in Oklahoma.
The primary producing counties in the SCOOP and STACK are seeing better job activity than other parts of the state. The jobless rates in Blaine, Canadian and Kingfisher counties have been on a steady decline since June. Blaine County’s workforce has grown, and the jobless rate fell from 4.3% in June to 4.2% in July and 3.8% in August.
Canadian County has a similar trend, also seeing an increase in its labor force. Its jobless rate has steadily declined from 4.6% in June, 4.4% in July and 4.3% in August. Kingfisher County also saw an increase in its labor force and like Blaine and Canadian counties, its jobless rate has slipped since June when the rate was 4.0%. In July, it dropped to 3.8% and reached 3.5% in August.
To grow the economy and help families prosper, Oklahoma must grow its number of high-paying jobs. The oil and gas industry is in the best position of any industry to add high-paying jobs and sustain these jobs as long as the state remains competitive for oil and natural gas development.
Warmington is president of the Oklahoma Oil & Gas Association