The boom in natural gas prices has led to revived interest in drilling in Oklahoma and Texas:
A flurry of home building, packed hotels, the new cars and trucks cruising the red dirt oil patch along the Texas border 110 miles west of Oklahoma City announce a natural gas boom that hasn’t been seen here since the collapse of the last boom nearly 25 years ago.
The boom is good for state tax revenue too:
The prosperity has boosted tax revenues and created jobs. High prices and high demand have filled the state’s coffers just three years after the worst budget shortfall ever.
Tax collections on oil and gas production that bottomed out at $249 million in 1999 were at $1.2 billion through the first six months of this year. State leaders have used the revenue windfall to cut taxes by $627 million, while approving record spending for education and roads. Every Oklahoma public school teacher has been given a $3,000-a-year raise.
Oklahoma is one of a handful of major energy-producing states that have seen severance tax collection rise sharply on higher energy prices. In Texas, natural gas tax revenues zoomed from $628 million in 2002 to $1.7 billion in the past year, the biggest growth area in tax collection in the state.
I hope they all remember the boom/bust nature of the industry, and don’t get used to the profits and their associated tax revenue!