Oklahoma State Treasurer Says Oil and Gas Tax Revenue Decline is a Problem in State’s Recovery

Oklahoma State Treasurer Says Oil and Gas Tax Revenue Decline is a Problem in State’s Recovery

July 2, 2020

Prior to the coronavirus-fueled oil price crash, the economic machine that is the oil and gas industry brought in billions of dollars of government revenue yearly. The vital and valuable sector of the U.S. economy has funded entire communities, while also feeding the whole country with tax revenue and providing millions of jobs nationwide.

Unfortunately, the industry has struggled in recent months with low energy prices and lack of demand. While June showed signs of recovery and resiliency, energy-dependent states like Oklahoma are feeling the hit on a statewide scale.

According to Oklahoma Energy Today:

June collections from the gross production tax, Oklahoma’s severance tax on oil and gas extraction, totaled $19.6 million, down by $72.5 million, or 78.7 percent, compared to the same month of last year. Compared to May 2020 reports, gross production collections are down by $18.6 million, or 48.7 percent. 

Oil and gas gross production tax collections brought in $829.2 million during the 12 months, down by $323.9 million, or 28.1 percent, from the previous 12 months. 

Oklahoma State Treasurer Randy McDaniel said, “The state economy showed strength in a number of key areas last month. However, the large drop in gross production tax receipts due to a decline in global demand shines a light on the challenges faced by a key Oklahoma industry.”

That key industry being the oil and gas sector of the state, whose June extraction tax receipts were the lowest monthly total in 10 years.

While eco-extremists continue to push for a “reset” on our energy sector, they should take a second to look at the numbers. Oklahoma’s state revenue is down $72.5 million or 78.7% from the same month last year because of the lack of oil and gas production. Now apply that to a national scale. Millions of families and billions of dollars in revenue depend on the oil and gas industry’s success. We should be looking at ways to revive the struggling industry, not ways to destroy it entirely.