The October General Revenue report revealed that Oklahoma’s oil and gas industry continues to struggle. Collections from the gross production tax have fallen each of the first four months of the fiscal year, with collection nearly 50 percent below last year’s collections through October.
In the face of reduced demand as consumers have restricted their travel plans, Oklahoma’s flagship industry has struggled throughout the year. It has been reported that oil and gas has seen the largest decline of any industry in Oklahoma during the pandemic.
Unfortunately, the outlook for the oil and gas industry remains uncertain. Joe Biden has put together an energy plan that looks to achieve net-zero greenhouse-gas emissions over four years, and net-zero emissions for the entire economy by no later than 2050. This proposal would cost an estimated $2 trillion, according to the Biden campaign, by increasing government subsidies for nontraditional energy sources. While this would greatly increase the national debt, something many Oklahomans oppose, it would also add a plethora of regulation for traditional energy sources. These regulations would not only harm many Oklahoma companies, but would result in increased costs for consumers as well.
It would be hard to quantify how damaging these proposals would be to Oklahoma’s economy, but considering the size of the oil and gas industry in the state, the impact would be severe. Over the last decade, the oil and gas industry has made up between 12 and 19 percent of the state’s GDP. That amounts to roughly $20 to $30 billion.
Source: Bureau of Economic Analysis; author includes oil and gas extraction and petroleum and coal products manufacturing for industry total; does not include government services
As oil and gas jobs are siphoned away throughout this transition, many Oklahomans will struggle to remain in the workforce. While some may be able to shift to emerging energy markets, many will be stuck in the government welfare system, exacerbating government dependence and the national debt.
Apart from left-wing organizations such as the Oklahoma Education Association’s parent organization, which endorsed and worked hard for Joe Biden, there is little appetite in Oklahoma for progressive policies such as Biden’s energy plan.
(Image: Gage Skidmore)