The natural gas and oil industry added nearly 12,000 jobs in Oklahoma over the last two years and remains the state's "defining industry," according to a new report from the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University.
Labor income, including wage and salary disbursements and self-employment income, last year grew to levels very near their pre-recession peak, providing a statewide average compensation per job of more than $113,000, according to the report, which was commissioned by the Oklahoma Energy Resources Board. "Income growth was strongest in the field, reflecting increased drilling activity and increased complexity associated with today's drilling technique," and average income from drilling jobs has grown significantly since the recession.
"Broad demand in the marketplace for skilled drilling workers in an increasingly technologically complex exploration environment drove drilling compensation up 30% to $65,593 per job," according to the report.
Since the end of the recession, "energy companies have added jobs to the payroll and are preparing for what most believe to be decades of strong growth as enhanced recovery techniques secure access to energy supplies and growing global economies increase their appetite for energy to sustain economic development, In the near term, however, pressure remains on the balance sheets of producers from a depressed natural gas price and a persistent gap in the West Texas Intermediate to Brent crude price," according to the report's authors.
In the meantime, "exploration and production activity generates substantial income streams for workers in the oil and natural gas industry, supports industries through indirect effects, and local retail outlets through induced effects as discussed previously. These income streams also generate corresponding flows of tax revenues." The natural gas and oil industry paid a combined $1 billion in taxes in Oklahoma in fiscal year 2011, about 12% of total state tax collections, according to the report.
An analysis of U.S. Census Bureau data issued earlier this year found that states with significant oil and natural gas resources did the best in weathering the recession, which ran from December 2007 to June 2009 (see Daily GPI, Feb. 3). According to census report, seven of the nine states that had the largest increases in real median annual household income (RMAHI) between 2007 and 2010 -- including Oklahoma -- are large energy producers. The researchers found that RMAHI had increased 1% in Oklahoma.
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