Oklahoma Oil and Gas Boom Continues; OKC Economy Climbing; Shale Play Big

The oil and gas boom continues in Oklahoma.  Everyday, I am getting more and more inquiries from around the nation asking for help in protecting Royalty Owner and Mineral Owner rights.

Oil and Gas Law is a blend of Contract, Tort, Real Estate and Personal Property Law, so the body of law is a fusion of many specialties.  Every State has a different flavor or spin on the law of Oil and Gas, thus it is imperative for any Royalty Owner or Mineral Owner to contact an attorney local to the oil and gas play.

For example, I will demonstrate that a recently published article in the Journal Record shows Oil and Gas Exploration in Oklahoma to be remarkable.  The O&G plays clearly contribute to the excellent fiscal health of Oklahoma.

By D. Ray Tuttle
The Journal Record
Posted: 08:38 PM Thursday, September 20, 2012

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The Tulsa skyline. Tulsa’s manufacturing employment over the last four quarters climbed 2.6 percent compared to the first quarter and jumped 11.3 percent over the last four quarters. (Photo by Rip Stell)

TULSA – Economic recovery remained strong in the Oklahoma City metro area during the second quarter, but the state experienced some variation as Tulsa stumbled in its recovery progress, according to the latest edition of the Brookings Institution Metropolitan Policy Program’s MetroMonitor index of economic recovery.

Oklahoma has benefited from the boom in natural gas and crude oil shale plays across the state, blunting the severity of the recession, Alec Friedhoff said. Friedhoff is a research analyst with the Metropolitan Policy Program and lead developer of the MetroMonitor. He oversees the program’s database of geographically oriented economic and demographic indicators, according to the Brookings website.

According to MetroMonitorOklahoma City’s economy climbed four spots to 22nd in the top 100 markets. Tulsa’s economy slipped a notch to 35th.

“Despite the variation within the state, the main takeaway is that both metro areas have had a robust recovery,” Friedhoff said. “Both cities are near the top.”

Tulsa might have suffered from more economic volatility, said Bob Dauffenbach, associate dean for research and graduate programs at the University of Oklahoma Price College of Business.

“Tulsa has a larger percentage of its workforce in manufacturing than in Oklahoma City,” Dauffenbach said.

Tulsa’s manufacturing employment over the last four quarters climbed 2.6 percent compared to the first quarter and jumped 11.3 percent over the last four quarters.

In Oklahoma City, the oil and natural gas industry, lumped in the mining sector in the Brookings report, saw a 2.7-percent rise compared to the previous three months and an 11.3-percent increase in employment over the past four quarters, second only to real estate, which gained 11.8 percent.

The biggest losers in Oklahoma City were the information sector, which lost 2.2 percent from the first quarter and 6.3 percent over the last four quarters, and construction, which gained 2.4 percent compared to the first quarter but fell 5.2 percent for the last four quarters.

In Tulsa, the finance and insurance sector fell 0.9 percent from the previous quarter and 1.3 percent over the last four quarters. Education, which slipped 1.1 percent from the previous quarter, was up 0.3 percent over the last four quarters.

Oil and gas employment in Tulsa rose 1.4 percent compared to the previous quarter and 6.6 percent over the last four quarters, according to the report.

Unemployment rates dropped in about half of the 100 metro areas surveyed, but still remained above 6 percent in all but 12 metropolitan areas, Friedhoff said.

“Eighty-seven metro housing markets reached new lows, reflecting a housing market yet to recover,” Friedhoff said.

The Oklahoma City metro was the 10th-best market for employment and 34th nationally in unemployment. Oklahoma City’s output was 55th out of 100 markets nationally, while housing prices were ninth best in the U.S.

Tulsa’s employment was 41st nationally, but unemployment ranked 21st, according to the report. Tulsa’s output was 51st nationally and its housing prices were 14th – tied with 87 other markets.

“Oklahoma City, being the seat of government, was a little more stable,” Dauffenbach said. “So, they do not suffer as much in a downturn; but they do not rise as much in an upturn.”

Oklahoma City’s good employment picture was due to the shale plays, he said.

“The big plays the shale gas and the increasing oil boosted the mining sector,” Dauffenbach said.

Friedhoff said government can be an economic stabilizer.

“If you are contrasting the two cities, government can be a stabilizer for the economy,” he said. “We saw that when tracking the recession early on – government centers were resistant to the effects of the recession.”

But, if government cuts back, it erodes that stable job base, Friedhoff said.

“So, government is not always the stable job provider,” he said.

And the report reflected that as among the slowest to recover have been the government centers of Albany, N.Y., and Harrisburg, Pa. Also, other state capitals and military metro areas like Honolulu; Little Rock, Ark.; and Virginia Beach, Va., have been slow to bounce back, according to the report.

In Oklahoma, Friedhoff said manufacturing could account for some economic slippage, but said a bigger economic factor was the strong oil and gas employment. Tulsa manufacturing gained indirectly because much of the sector relies on oil and gas activity.

“Oklahoma City has a larger percentage of its employment base tied to oil and gas,” Friedhoff said. “Oil and gas is not as important in the Tulsa economy.”

Overall, the state economic picture is remarkable, he said.

“The group of markets in the midsection of country has had a robust or stronger recovery,” Friedhoff said.

By contrast, the recovery has proceeded slowly in the Northeast, where metro areas have generally followed modest growth less characterized by large boom and bust growth cycles, Friedhoff said.

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