HIGH natural gas prices have some states riding high once again
Tuesday, May 22nd 2001, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ Energy-rich states whose economies suffered during the oil bust of the mid-1980s are riding high again thanks to a sharp rise in natural gas prices.
Oklahoma, New Mexico, Texas, Wyoming and Louisiana are enjoying a windfall in tax revenue.
The money represents an opportunity to spend more on various programs or avoid the kind of cutbacks other states are facing.
``Without this energy enhancement, we would in all likelihood be doing what about have 24 other states are doing, which is cutting budgets or depleting their reserve funds,'' said Oklahoma state Sen. Cal Hobson.
But painfully aware that a boom can turn quickly into a bust, some legislators are counseling restraint. Texas and Wyoming, in fact, are locking away much of the money.
The average well price of natural gas nearly quadrupled across the country last year, going from $2.12 per thousand cubic feet in January 2000 to $8.06 a year later, according to the Energy Department. The price now stands at about $5.15. By comparison, the average price for U.S. crude oil has changed little over the last year and a half.
The increase in natural gas prices has brought hefty tax revenue to states that have nursed their oil and gas industries through years of hard times and low prices.
Oklahoma's natural gas revenue projections rose from $198.1 million early last year to $506.7 million this year, giving legislators extra money to spend on priorities such as education, prisons and tax cuts.
In Wyoming, a budget surplus of $168 million last June is now projected at $695 million, mostly because of higher natural gas prices.
New Mexico _ second only to Texas in natural gas production _ is projecting its highest revenue ever from crude oil and natural gas production, up 80 percent in the current fiscal year.
In Louisiana, revenue from natural gas is up 15 percent this fiscal year and is expected to add about $1 billion to the state budget.
Texas puts three-quarters of any gas and oil revenue over 1987 levels into a rainy day fund that can be tapped only by a three-fifths vote in both houses of the Legislature to correct certain budget shortages.
Wyoming will also be locking away much of its surplus, though it does plan to spend about $75 million to improve its water infrastructure.
Wyoming state Rep. Michael Baker, co-chairman of the Joint Appropriations Committee, said it is not easy being the gatekeeper when there is a lot of money available.
``When they know that big buck is in the pocket, by golly, it's harder to hold the brakes down,'' he said. ``They kind of gang up on you and run you over.''
In Oklahoma, Hobson said legislators learned their lesson about spending oil and gas money in the 1980s when the boom went bust and lawmakers had to raise taxes four times to fulfill commitments to roads, education and other services.
``Often you're hearing in the rotunda here, `Let's go build this and build that,''' Hobson said. ``That's all good, but my advice is: Let's see where these prices are going.''