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State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov A publication of the Office of the State Treasurer • Treasurer Ken Miller, Ph.D. Economic Report TM Volume 2, Issue 4 • April 30, 2012 Oklahoma News and analysis of Oklahoma’s economy Inside SEE NATURAL GAS PAGE 3 • Treasurer’s commentary: Functional finance • Debt reduction plan • Tobacco funds distributed • Two-year growth streak ends • General Revenue Fund tops estimate • State unemployment drops • Economic indicators Contributors Regina Birchum, Deputy Treasurer for Policy Paul Ackerman, CPA Maxim Salitra, Treasury Intern Editor Tim Allen, Deputy Treasurer for Communications It seems that each day brings another story of record low natural gas prices and record high supplies. A warmer-than- normal winter in the United States drove down natural gas demand this year at a time when prices usually rise and supplies are reduced. As a result, natural gas in storage is at or near record levels while prices are at their lowest in more than a decade. The U.S. Energy Information Administration (EIA) estimated natural gas in storage at the end of March at 2.48 trillion cubic feet, about 57 percent higher than at the same time last year. According to Bloomberg, the average spot price in April at the Henry Hub in Louisiana was $1.99 per thousand cubic feet (mcf) as of April 27. Budget concerns In February, the State Board of Equalization certified estimated collections from the gross production tax on natural gas at $188 million for the General Revenue Fund during Fiscal Year 2013. The estimate assumed an average price for natural gas of $3.64/ mcf. At that time, board members expressed concerns that the price estimate was overly optimistic, but ultimately agreed to approve the estimate as compiled by the Oklahoma Tax Commission and Office of State Finance using statutory guidelines. Those urging passage argued the constitutionally-mandated five-percent difference between appropriations authority and anticipated revenues would provide enough flexibility to keep Natural gas: beneath the surface Sources: Oklahoma Tax Commission, Bloomberg Natural Gas Prices and Taxes April 2011 - March 2012 $20.0 $27.5 $35.0 $42.5 $50.0 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12$2.00 $2.75 $3.50 $4.25 $5.00 Henry Hub Spot Price/mcf Gross Production Collections (in millions) Gross Natural Gas Tax Collections Natural Gas Spot Price Note: Spot prices are from production months, two months prior to listed date of tax remittance.
|Okla State Agency||
Treasurer, Oklahoma State
|Okla Agency Code||
|Title||Oklahoma economic report, 04/30/2012, v.2 no.4|
Oklahoma. State Treasurer.
|Purpose||Natural gas: beneath the surface; Treasurer's Commentary: Functional finance; Debt reduction plan; Oklahoma jobless rate drops; Oklahoma tobacco settlement funds distributed; Two-year revenue growth streak ends as collections fall|
|For all issues click||T1400.6 E19r|
|Digital Format||PDF Adobe Reader required|
|ODL electronic copy||Downloaded from agency website: http://www.ok.gov/treasurer/documents/OER_4-30-12.pdf|
|Rights and Permissions||This Oklahoma State Government publication is provided for educational purposes under US copyright law. Other usage requires permission of copyright holders.|