Gov. Mary Fallin is optimistic currently low energy prices will rebound.
"We're hoping that this energy depression is on its down side and getting ready to come back up," Fallin said. "We think it will soon, because we've been here for a little bit of a time. But it's certainly challenging to the state budget, and it's challenging to Oklahoma families."
Declining oil and natural gas prices helped push state revenue down 5 percent — or about $50 million — last month from July 2014. State collections of gross production taxes on oil and natural gas were about half as much as a year ago.
Fallin said state government has been doing the right thing by consolidating operations or downsizing to cope with having less revenue.
"And we're going to have to continue to do that, even into the next year when we begin our legislative session, because there are long-lasting repercussions for an energy sector downturn," Fallin said. "But when it does come back, it's going to come back strong, and it's going to really help our state."
The spot price for oil at the Cushing hub is $45.25 a barrel, still above a 10-year low of $34.96 in 2009. At this time last year, the price was $98.26.
Despite lower energy prices, crude oil production in Oklahoma is on an upward trend after bottoming out in June 2005. Production in May 2015, however, was slightly below production in May 2014.
Oklahoma has recently secured hundreds of jobs through a steel mill in Durant, new Boeing facilities in Oklahoma City and a Macy’s fulfillment center in the Tulsa area.
"We are seeing diversification. We are seeing new growth," Fallin said. "We are seeing that we're doing the right things to make Oklahoma business-friendly, and we will get through this."
Oil production in Oklahoma today is nearly double what it was in July 2008, when the price of oil peaked at more than $141 a barrel.
