26 December 2002
It's a gas
It's no particular secret that Oklahoma, like many other states, is in dire financial straits this year, no thanks to a stagnant economy and rising expenses.
There is one bright spot on the horizon, though: natural gas prices, while not quite through the roof, are definitely knocking on the ceiling. And Oklahoma, a major producer of the stuff, collects a production tax based upon those prices.
The state budget anticipates $252 million from the tax this coming year, a projection based upon an expected market price of $2.52/mcf (thousand cubic feet). However, the current market price, due to low production and nasty weather, is more than twice that: the closing price Tuesday was $5.15, and most analysts expect the price to hold above $4.00 for at least a year, maybe longer, depending on how much (if any) production increases. At four bucks per mcf, the take from the gas-production tax would be about $147 million higher, which would put a sizable dent in the state's projected $593 million shortfall.