Oklahoma economic report : news and analysis of Oklahoma's economy, 5/31/2012, v.2 no.5

              State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov
A publication of the Office of the State Treasurer • Treasurer Ken Miller, Ph.D.
Economic Report TM
Volume 2, Issue 5 • May 31, 2012
Oklahoma
News and analysis of Oklahoma’s economy
Inside
SEE ENERGY PAGE 3
• Treasurer’s commentary: Tax
reform revisited
• 10 things you should know
about the Keystone XL pipeline
• Revenue collections resume
rise
• State unemployment at lowest
level since 2008
• Economic indicators
Contributors
Regina Birchum, Deputy
Treasurer for Policy
Paul Ackerman, CPA
Editor
Tim Allen, Deputy Treasurer for
Communications
In 1953, General Motors President
Charles Watson declared before
Congress at a hearing assessing his
qualifications to become Secretary
of Defense, “What was good for the
country was good for General Motors
and vice versa.” In the decades
following, Watson’s legendary quote has
taken on a life of its own, and has since
morphed into a succinct declarative: As
General Motors goes, so goes the nation.
In Oklahoma, a similar mutually-beneficial
relationship exists between
the state and the energy sector. This
relationship remains the backbone of
Oklahoma’s economy, even as the state
has grown its non-energy sectors. The
recent announcement made by Google
to expand its data center in Pryor
provides an example of how the state
has continued to diversify its economy.
Even as the state welcomes and courts
new industry, the declarative, though
revised, holds true: As energy goes, so
goes Oklahoma.
Oklahoma entrepreneurs have driven
the expansion of Oklahoma’s energy
sector the past two decades, making
conscientious decisions to establish,
build, grow and sustain their companies
in Oklahoma. When speaking of
Oklahoma’s economic vitality, the
importance of independent energy
giants such as Devon, Chesapeake,
Continental, SandRidge, Williams,
Chaparral and many smaller exploration
and production companies cannot be
overstated. Their contribution to the
state has been substantial.
A study commissioned by the Oklahoma
Energy Resources Board finds the oil
and natural gas industry is responsible
for $52 billion, or about one-third, of
Oklahoma’s gross state product. In the
past two years, the industry has added
nearly 12,000 jobs, including almost
4,000 jobs to the self-employed.
Running on energy
0%
20%
40%
60%
80%
Alaska
North Dakota
Wyoming
New Mexico
Oklahoma
Louisiana
Texas
Utah
Kansas
Colorado
1.9% 1.8% 1.6%
8.2% 6.2%
10.7%
16.2%
42.4%
49.3%
76.5%
Source: US Census Bureau, State Government Tax Collections 2011
Oil and Gas Severance Taxes as
Percentage of State Budgets