Oklahoma’s energy secretary has unveiled an aggressive 25-year program designed to reverse the state’s dwindling oil and natural gas production and also ensure its status as one of the top industry leaders into the future.
In a 49-page report presented to the governor, state Energy Secretary Robert J. Sullivan Jr. said the state is “well positioned” to become a national resource for cutting-edge energy research and to take advantage of its abundant alternative energy resources, especially wind and solar power. Natural gas production peaked in the state in 1990; oil production peaked in 1967.
“While state energy producers have extracted some 14 billion barrels of oil and 87 trillion cubic feet of gas since the first wells were drilled a hundred years ago, that rate of production cannot continue, since remaining reserves are harder to reach and extract,” the report said.
Sullivan, appointed energy secretary in 2002 by former Gov. Frank Keating, worked on the comprehensive plan for more than nine months with experts from Oklahoma’s universities and the oil and gas industry.
As a first step, the plan suggests aggressively researching how to reduce the cost of oil and gas production in marginal fields. The report recommends strengthening “old” incentives for the oil and gas industry and “initiate and apply new technologies” to lower finding and producing costs for the extensive remaining reserves.
“A critical review of taxes of all kinds should take place with an eye toward ensuring that Oklahoma is a tax-friendly environment for energy companies to pursue the state’s energy resources,” according to the report. It also recommends clarifying the role of the Oklahoma Corporation Commission’s jurisdiction to “ensure that producers can interact with a single agency in all regulatory matters that affect their operations.”
Another initiative would be to create and implement a marketing plan that would gain national and international markets for its energy resources. “We have some marvelous resources, what we don’t have is an effective marketing program,” said Sullivan. “We need to aim at marketing, so that companies think of Oklahoma as the place to come for energy resources, experts and technology.” Indicating that he might lose a “few friends” in the oil and gas industry, the energy chief also wants to build the state’s renewable resources.
“Wind can be thought of as the next cash crop for Oklahoma ranchers and farmers,” he said. “At present, however, our state does not have a single large wind energy project (greater than one megawatt), and we are falling behind our neighboring states in the development of wind energy.” Sullivan also said Oklahoma’s 300 days of sunshine each year also offer promising opportunities for solar power generation.
Sullivan recommended that the state become a national and internal center of ideas and research in the energy field. “Oklahoma is well endowed with a deep reservoir of knowledge in our higher education institutions,” he said, noting that closer working relationships among the University of Oklahoma, Oklahoma State University, the University of Tulsa and other colleges and universities, and the oil and gas industry, would lead to new research and better, more economically viable, drilling and production techniques.
To read the full report, visit the Oklahoma governor’s web site at www.governor.state.ok.us/, and click on the “Latest News.” The report may be downloaded.
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