Last March, we ran a blog post we titled “Kill the drill” commenting on a front-page  New York Times story on the  steep drop in drilling activity that accompanied plunging oil prices and gas prices in early 2009. The Times declared that, “The great American drilling boom is over,” and concluded that with prices plummeting, “the result for companies is that it is becoming unprofitable to drill.” The Times quoted Oklahoma’s Devon Energy as Exhibit A of the drilling hangover era:

“The big bonanza is over,” said Jay Ewing, the completion and construction manager for Devon Energy in the Barnett Shale field here, where so far this year his company has brought its rig count from 35 to 8. “Everyone is really shocked how fast everything has turned.”

Energy experts and company executives warn that oil and gas companies now cutting back on investments will be unable to respond quickly to a future economic recovery. John Richels, Devon’s president, said that if the slump lasted two years, it could then take 18 to 24 months for companies to reassemble rig crews.

We reproduced the Times’ chart showing “a precipitous decline in oil and gas drilling”: Read the rest of this entry »

This week we released the July edition of Numbers You Need, our monthly bulletin of key economic and budget trends.  The monthly report contained some glimmers of good news, as the state’s unemployment rate rose by a relatively modest 0.1 percentage point to 6.3 percent in May, while rising energy prices (of benefit to Oklahoma) contributed to a modest increase in the Consumer Price Index. However, if we step back and compare where we are now to our situation 12 months ago, we get a sense of the extent of the  economic downturn’s toll on the state’s economy and population. Compared to 12 months ago, we find (numbers compare May 2009 to May 2008, except where otherwise noted):

• 39,900 fewer Oklahomans employed;
• A 77 percent increase in the number of unemployed;
• More than three times as many Oklahomans receiving Unemployment Insurance benefits;
• Over 51,000 more people receiving food assistance (Supplemental Nutrition Assistance Program, formerly food stamps) benefits and almost 26,000 more people on Medicaid (April 2009 vs. April 2008);
• State General Revenue collections down 30 percent (June 2009 vs. June 2008)

The weak economy continues to place great strains on both our private and public safety net support systems.  Fortunately, the federal stimulus bill included increases in both Unemployment Insurance and food assistance benefits, as well as help for states to protect Medicaid health insurance coverage and avoid layoffs of teachers and other public sector employees. This  provides crucial help to families in need and keep dollars circulating through the economy at a time when state resources are declining.

We hope you’ll check out Numbers You Need and post a comment sharing your thoughts.

Sunday’s edition of the New York Times had a front-page report on the steep drop in drilling activity that has followed plunging oil prices in recent months. Since last summer, the number of oil and gas rigs deployed to tap new energy supplies across the country has fallen by half, and the drop is accelerating, especially for natural gas production. The Times quotes Oklahoma’s Devon Energy as Exhibit A of the drilling hangover era:

“The big bonanza is over,” said Jay Ewing, the completion and construction manager for Devon Energy in the Barnett Shale field here, where so far this year his company has brought its rig count from 35 to 8. “Everyone is really shocked how fast everything has turned.”

Energy experts and company executives warn that oil and gas companies now cutting back on investments will be unable to respond quickly to a future economic recovery. John Richels, Devon’s president, said that if the slump lasted two years, it could then take 18 to 24 months for companies to reassemble rig crews.

Read the rest of this entry »