Collections from Oklahoma's gross production taxes on natural gas and oil were lower in April than they were in the same month last year, marking the fifth straight month with such a decline, according to state treasurer Ken Miller.
The state has seen the percentage of gross production taxes generated by natural gas production decrease steadily as prices have fallen, Miller said in an economic report.
"In October 51% of gross production collections came from gas extraction. By March the amount had fallen to 34%," Miller said. "The proportion of the tax produced by natural gas in April shrank to 32%."
Gross production collections in April reflected prices and production from February, when Henry Hub spot prices averaged $2.51/Mcf; prices in April averaged less than $2, Miller said.
"We will closely monitor falling natural gas prices in the coming months to gauge any impact," Miller said. "Right now the Oklahoma economy looks good and free of any spillover effects."
The state's unemployment rate fell to 5.0% in April, its lowest level since December 2008, according to the Oklahoma Employment Security Commission. A recent study commissioned by the Oklahoma Energy Resources Board found that the natural gas and oil industry has added nearly 12,000 jobs in Oklahoma over the last two years and it remains the state's "defining industry" (see Daily GPI, May 14).
An analysis of U.S. Census Bureau data issued earlier this year found that states with significant energy resources did the best in weathering the recession, which ran from December 2007 to June 2009 (see Daily GPI, Feb. 3). According to the 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.
Natural gas production in the Lower 48 states was 71.76 Bcf/d in March, a 0.26 Bcf/d (0.4%) decrease compared with 72.02 Bcf/d in February, and production in Oklahoma slipped 0.2% to 5.31 Bcf/d, according to the Energy Information Administration's latest Monthly Natural Gas Gross Production report (see Daily GPI, June 1).
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