Energy price benefit for Oklahoma
Thursday, August 18th 2005, 10:27 am
By: News On 6
A silver lining to the high cost of fuel. It's frustrating paying such high prices at the gas pump, but the high prices at the pump are a mixed blessing for Oklahomans.
News on 6 anchor Craig Day says the price of oil is now at about $63 a barrel. That contributes to our high prices at the pump. But it's welcome news for Oklahoma's oil and gas industry.
"Down here, we're building some mud cleaning equipment." Trevor Young is the president of Tulsa Rig Iron which manufactures pumps and other equipment for the oil and gas industry. Young says the company has hired additional employees to keep up with demand since the price of oil went up. "We've seen huge increases in pump sales and associated equipment in the oil field. We're sending pumps to Canada and Texas and Kansas and Australia and all over the world for $65 oil."
Young's company is an example of Oklahoma businesses benefiting from the high price of oil.
The Oklahoma Independent Petroleum Association says the increased price of oil has meant more exploration. Kent Harrell is on the association's board and owns an energy company in Tulsa. â€œThe primary thing it has done is it has increased drilling activity tremendously in this state."
That includes marginal wells. They are wells that may not produce enough oil to offset expenses when prices are low, but are now operating since the price is high. The increased activity is not only good for the oil companies; it's good for Oklahoma's economy.
The surge in drilling and the renewed interest in marginal wells translate into more jobs and tax revenue. Trevor Young plans to invest in new equipment and hire more workers, which would add to the 4,200 new jobs that have been created in the industry in Oklahoma so far this year.
Kent Harrell: "If it goes away next month, which I guess it could, it will be a spike, but if it lasts for two or three years it will be a boom." The bottom line is right now is that it is a good time to be in the industry.