Statistics recently released by the Oklahoma CorporationCommission (OCC) show gas production in the state last year reachedits lowest level since 1968. However, OCC Commissioner Bob Anthonysaid he sees no cause for alarm and expects little or no furthererosion in production this year forward.

Last year’s production was 1.713 Tcf, down from 1.737 in 1996,1.775 in 1995 and 1.890 in 1994. Production in 1993 was 2.02 Tcf,and the highest level ever was 2.264 in 1990. “Recent data indicatefor the last three years, production in Oklahoma has been flat,”Anthony said. “For three years in a row, it’s been essentially 1.7[Tcf]. I do not believe from this point forward that we will havedeclining production. There’s no reason to believe that in anoverall sense it will be declining.”

Oklahoma’s static production is due to some of the state’sexports being displaced by Canadian gas and coalbed methaneproduction. Oklahoma exports about two-thirds of its production,Anthony said, a greater percentage than that of productionexported by Texas and Louisiana. “The picture nationally is agrowing or expanding market, and because of that I’m willing tostate although our production has flattened out in recent yearsthat it’s still fundamentally strong and it’s still a fundamentallyimportant part of our economy in Oklahoma.”

Oklahoma is unbundling its upstream gas industry and plans tounbundle the downstream next. Unbundling is seen by the OCC as anopportunity to turn the state’s gas supply into an economicdevelopment tool. Fertilizer manufacturing operations consume thegreatest share of gas in the state. Lumber processing is anotherbig end user, Anthony said. “I think because we have this resourcebase we’re trying to encourage those types of industries.

“I think that our unbundling and competition rules will enhanceopportunities for our Oklahoma producers. We have had producers andoperators who have transmission or storage facilities orcapabilities who have not necessarily participated in serving ourgas utility industry. And now that we’re having unbundling andcompetitive bidding, they’re given greater opportunity toparticipate.”

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