Energy policy in Oklahoma

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Energy policy in Oklahoma
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Quick facts
Energy department: Oklahoma Department of Commerce, Office of Community Development
State population: 3.9 million
Per capita income: $39,006
Energy consumption
Total energy consumption: 1,595 trillion BTU[1][2]
Per capita energy consumption: 421 million BTU
Energy spending
Total state energy spending: $19,766 million
Per capita energy spending: $5,223
Residential natural gas price: $19.85 per thousand cubic foot
Residential electricity price: 10.59 cents per kWh
See also
Energy on the ballot
Statewide fracking on the ballot
Local fracking on the ballot
Policypedia
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Energy Policy Project
Energy policy in the United States
Energy use in the United States
Energy terms and definitions
Energy policy in Oklahoma
Fracking in Oklahoma

Energy policy in Oklahoma depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.

How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Oklahoma, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.

Energy policy involves tradeoffs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.

See also: "Energy policy in the United States"
See also: "Fracking in Oklahoma"

Energy overview

State facts

Below are quick facts about Oklahoma’s energy climate.

Oklahoma

  • is a net electricity exporter.
  • has fossil fuels in the form of crude oil, natural gas and coal.
  • has some renewable energy resources in the form of wind, hydropower and biomass.
  • ranked fifth in the nation for onshore crude oil production in 2011.
  • is among the top in the nation for natural gas production.
  • has renewable energy standard of 15 percent of energy generation capacity by 2015.[3]

In Oklahoma

  • over one-half of households use natural gas as their primary home heating source.
  • about one-tenth of total natural gas is used by the residential sector.
  • per capita energy consumption is high.
  • renewable energy sources meet about one-tenth of its electricity production needs.
  • industry is the largest energy-consuming sector in the state.[3]

Available energy resources

Oklahoma has traditional energy resources including natural gas, oil and coal. Because of the state’s access to major pipelines it exports both oil and natural gas. Although Oklahoma produces some coal it is not enough to meet the state's energy needs. Almost all of the coal consumed in the state is shipped from Wyoming by rail.[3]

Oklahoma has renewable energy resources that contributed one-tenth of the energy for electricity in 2011 according to the U.S. Energy Information Administration (EIA). Oklahoma meets its renewable energy goal mostly through wind energy. Other resources come from hydroelectric dams and a small portion from biomass.[3]

Consumption and prices

Energy consumption in Oklahoma
OK energy consumption chart.png

Legend[4]
     Transportation       Residential     Industrial       Commercial
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As shown on the pie chart in 2011, more than 35 percent of Oklahoma's energy was used by the industrial sector, a little less than one third for transportation, one-fifth for residential use and the rest for commercial buildings--for heating, cooling, lighting and other functions. Most of the energy used in the state is in the form of natural gas followed by coal and petroleum.[5]

The price of gasoline in the state generally tracks below the national average.[6][7] According to the EIA's February 2014 report, the federal excise tax is 18.40 cents per gallon of gasoline and 24.40 cents per gallon of diesel fuel. In addition to that, Oklahoma has an excise tax on gasoline, which is 17 cents per gallon, ranking it the 46th highest gas tax in the nation.[8]

Comparisons tables

The table below compares Oklahoma's consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Arkansas, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example:

  • Arkansas's rank of 31st in carbon emissions means that carbon emissions are lower in Arkansas than in Oklahoma, which has a ranking of 19th.
  • Likewise, per capita income in Oklahoma is different compared to Arkansas, which at 46th ranks 13 places behind Oklahoma's ranking of 33rd in per capita income.
  • Natural gas prices are similarly ranked: Oklahoma ranking 23rd and Arkansas 21st.
  • Oklahoma is ranked 45th lowest electricity price and Arkansas is ranked similarly at 44th.
  • Oklahoma produces about 3.5 percent of the nation's total energy and Arkansas produces about 1.8 percent.
  • These two states are similarly placed in the mid rank on population and overall energy consumption.
  • Per capita energy consumption in Oklahoma (at 11th) is somewhat higher than in Arkansas (at 17th), but per capita spending in Arkansas is lower since it ranks 21st to Oklahoma ranking of 13th.

The difference in per capita spending may result, in part, from the fact that Oklahoma has a renewable energy portfolio standard (RPS) and Arkansas does not.[9][10][11][12]

Consumption and Expenditures Comparisons Summary
Type OklahomaArkansasU.S. Figures
FigureU.S. Rank*FigureU.S. Rank*Totals
Population3.9 million283.0 million32313.9 million
Per Capita Income Average$39,00633$34,72346$42,693
Total Consumption1,595 trillion BTU231,117 trillion BTU3197,301 quadrillion BTU
Per Capita Energy Consumption421 million BTU11380 million BTU17312 million BTU
Total Spending on Energy$19,766 million26$14,047 million33$1,394,088 million
Per Capita Spending on Energy$5,22313$4,78021$4,474
Price of Residential Natural Gas, dollar per thousand cubic feet$19.8523$17.1621$12.48
Price of Electricity, cents per kWh10.59459.544412.31
Total Carbon Dioxide Emissions, million metric tons (2010)103.41966.1315,631
*Rank is from highest to lowest.

Natural gas is the most common home heating source in Oklahoma, with 54.6 percent of homes using natural gas. Electricity is the next most common source, with consumers in Oklahoma almost matching the national average. The next most common sources are LPG, other sources and fuel oil, which is not commonly used.

See also: State Energy Rankings to compare all 50 states
Consumption of energy for heating homes in Oklahoma
Source Oklahoma 2011 U.S. average 2011
Natural gas 54.6% 49.5%
Fuel oil 0.1% 6.5%
Electricity 35% 35.4%
Liquid Petroleum Gases (LPG) 7.6% 5%
Other/none 2.7% 3.6%

Production and transmission

Oklahoma produced 2,722.9 trillion BTU of energy in 2011. Nearly 80 percent of that came from natural gas and just over 16 percent came from crude oil. The remaining 4 percent came from coal and what the U.S. Energy Information Administration classifies as 'other,' which is "assumed to equal consumption of all renewable energies except biofuels."[13]

Energy production by type in Oklahoma, 2011
Type Amount Generated
(trillion BTU)
% of State % of USA
Crude oil 444.8 16.34% 3.72%
Natural gas 2,163.4 79.45% 8.17%
Coal 19.1 0.7% 0.09%
Other 95.6 3.51% 1.34%

Electricity produced and consumed in Oklahoma is primarily from coal, which accounts for almost 47 percent of the state's total electricity. All of the coal used in electricity generation is shipped into Oklahoma by rail from Wyoming.[14]

Natural gas is used to produce over 13 percent of electricity, with the rest produced using renewable energy resources. Natural gas is one of Oklahoma's largest industries. The state does not use all of the electricity that is produced. Instead it ships the excess to other states, making the state a net interstate electricity exporter.[15]

Where electricity comes from in Oklahoma[16]
Type Amount generated (MWh) % of state** % of U.S.**
Petroleum-fired 1,000 0.02% 0%
Natural gas-fired 1,750,000 31.42% 0.17%
Coal-fired 2,603,000 46.74% 0.15%
Hydroelectric 145,000 2.6% 0.05%
Other renewables 1,075,000 19.3% 0.53%
Total net electricity generation 5,569,000 100% 0.14%
**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.

In Oklahoma, the Oklahoma Corporation Commission regulates three major investor-owned utilities. There are 33 electric utilities that have opted out of price regulations, in which 30 are cooperatives. Oklahoma has seven regulated gas companies. State laws do not allow city-operated gas utility to be regulated by the Oklahoma Corporation Commission.[17][18] Southwest Power Pool provides the state's electric transmission system.[19]

Energy policy

Policy Issues

Oklahoma has a renewable energy portfolio standard (RPS). One study has found that prices in states with RPS were an average of 38 percent higher than in states without RPS.[20][21][22]

See also: Fracking in Oklahoma

Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves tradeoffs in which energy production and prices are weighed against environmental concerns and efficiency. Oklahoma has been below average regarding energy efficiency and renewable energy use. The Oklahoma Corporation Commission (OCC) created efficiency rules for natural gas and electricity in 2008. These programs require three-year program plans that must be submitted to the commission. The state legislature established renewable energy standards that require 15 percent of total electricity production capacity come from renewable sources by 2015. The American Council for an Energy Efficient Economy (ACEEE) is a nonprofit and nonpartisan organization dedicated to improving energy efficiency policy in the United States. Each year, they rank each state by their energy efficiency policies. Oklahoma ranked 37th on the Energy Efficiency Scorecard produced by the American Council for an Energy-Efficient Economy.[23] There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gain in energy efficiency will be eroded as consumers consume additional goods and services."[24][25]

Major legislation

  • The Alternative Fuel Technician Certification Act (2007), regulates the training, examination and certification of technicians who modify, install, renovate, or repair equipment used in alternative fueling facilities. The act also regulates the conversion of any engine into an alternative fuel operating engine.[26]
  • The Domestic Fuels Act (2012), was created to make alternative fuels available to more consumers. This act streamlines the process so that all fuels, both renewable and traditional, can be dispensed and stored with common equipment. It will establish a new route for retailers to safely and legally sell new fuels with their equipment.[27]
  • Conserving Oklahoma Act (2008), requires all new state-owned buildings or substantial renovations of state-owned buildings to meet Leadership in Energy and Environmental Design (LEED) standards. These standards include a minimum energy performance threshold. The act does not necessarily mandate that state-owned buildings optimize energy performance.[28]
  • Oklahoma Energy Security (OES) Act (2010) established a statewide goal of having 15 percent of all installed electricity production capacity come from renewable energy sources by 2015. Resources that qualify include wind, solar, hydropower, hydrogen, photovoltaic, geothermal and biomass. To facilitate wind-energy creation, the Oklahoma Corporation Commission is working with Southwest Power Pool to develop a plan for expanded transmission capacity.[29]
  • The Oklahoma Wind Energy Development Act (2011) provides rules for wind energy facility owners relating to payments, decommissioning and insurance. Facilities are required to have general liability insurance before construction begins. Owners are required to provide an explanation to the state of Oklahoma detailing the calculated payments for wind projects costs like facilities, insurance, and equipment and confirming the accuracy of the payments. After 15 years of operation, the owners must file a report that includes estimated decommissioning costs and proof of financial security. If the project is abandoned, in one year the equipment must be removed and land returned to its condition prior to construction.[30]
Policypedia
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State energy policy

State fracking policy

Energy policy terms

Fracking in the U.S.

Energy use in the U.S.

Energy policy in the U.S.


See also
Local fracking on the ballot

Statewide fracking on the ballot

Government agencies and committees

  • The Oklahoma Corporation Commission (OCC) is an independent regulatory agency that has been regulating Oklahoma public utilities since 1907. It enforces laws and manages activities related to oil, gas, electric, petroleum storage tank, mineral rights, cotton gins, household goods carriers, motor carriers, passenger carriers, pipelines, railroads, telephone and trucking. It also regulates the operation of utilities and intrastate transportation. The commission currently regulates public utilities, unless they are under federal or municipal jurisdiction. The OCC is composed of three full-time commissioners who decide the cases brought to the OCC for changes in utility operations, rates and for construction projects. Commissioners are elected statewide and confirmed by the senate for staggered, six-year terms.[31]
  • The Oklahoma State Energy Office serves as the coordinator of ideas, businesses, organizations and private citizens to implement new ways to use energy resources wisely in homes, the transportation sector, and businesses. The office has information, tools, and resources on renewable energy. Oklahoma also receives funding from the U.S. Department of Energy for the office to fund projects. Qualified projects should increase the efficiency of buildings and vehicles in order to receive funding. Tax credit incentives are also available at the state and federal level for renewable energy, energy efficiency and alternative fuels.[32]

Major organizations

  • The Energy Institute at the Price College of Business in the University of Oklahoma seeks to improve sustainable and innovative solutions to the present energy challenges in Oklahoma, the nation, and global community. Through a community of academics and practitioners, the center seeks out financial institutions, energy-related firms and federal and state agencies with a similar vision to integrate their focus. Education, research and outreach directs their program goals in the communities.[33]
  • National Energy Solution Institute (NEISI) of Oklahoma State University "fuses the needs of private industry in energy production, distribution and conservation with practical and impactful academic research." The institute provides solutions for the current and future energy demands of the nation. Their scientists collaborate and work with private, state and federal sectors to incorporate the nation's transition into an energy sustainable future. They emphasize training and education in order to fulfill their goal with the belief that the educated workforce will provide advanced energy technology, economics and policy to the nation.[34]
  • The Association of Central Oklahoma Governments (ACOG), Clean Cities was set apart as the nation's first regional Clean Cities energy program. The program mainly represents central Oklahoma's metropolitan area but members are spread statewide. The current stakeholders in the program represent more than 45 business and government groups. Their goal is to become independent from petroleum, increasing the use of alternative fuels, increasing the use of advanced technology vehicles and low level alternative fuel blends, hybrid and fuel efficient vehicles and improving air quality and fuel economy policies. In addition, the group envisions job growth in the industry.[35]

In the news

This section displays the most recent stories in a Google news search for the term "Oklahoma+Energy+Policy"

All stories may not be relevant to this page due to the nature of the search engine.

Oklahoma Energy News Feed

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See also

External links

References

  1. These figures come from the U.S. Energy Information Administration "State Profiles and Energy Estimates, Oklahoma Overview." Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
  2. U.S. Energy Information Administration, "Oklahoma Overview," accessed March 5, 2014
  3. 3.0 3.1 3.2 3.3 U.S. Energy Information Administration, "Oklahoma Profile Analysis," December 18, 2013
  4. This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
  5. U.S. Energy Information Administration, "Oklahoma Profile Analysis," December 18, 2013
  6. Gas Buddy, “Historical Gas Charts,” accessed March 5, 2014
  7. To compare current gasoline prices in Oklahoma to the U.S averages, go to GasBuddy.com
  8. Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013
  9. Institute for Energy Research Study, "The Status of Renewable Electricity Mandates in the States", accessed March 5, 2014
  10. This study found that in 2010 electricity prices in states with RPS were an average of 38 percent higher than in states without RPS.
  11. U.S. Energy Information Administration, "Oklahoma Profile Analysis," December 18, 2013
  12. U.S. Energy Information Administration, "Arkansas Profile Analysis," December 18, 2013
  13. U.S. Energy Information Administration, “State Energy Data System, Production,” accessed February 18, 2014
  14. U.S. Energy Information Administration, "Oklahoma Profile Analysis", accessed March 5, 2014
  15. U.S. Energy Information Administration, "Oklahoma Profile Analysis", December 18, 2013, accessed March 5, 2014
  16. These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Oklahoma Overview," accessed March 5, 2014
  17. Oklahoma Corporation Commission, "Regulated Electricity Utilities," accessed March 5, 2014
  18. Oklahoma Corporation Commission, "Regulated Natural Gas Utilities," accessed March 5, 2014
  19. U.S. Energy Information Administration, "Oklahoma Profile Analysis," December 18, 2013, accessed March 5, 2014
  20. Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
  21. Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
  22. U.S. Energy Information Administration, Oklahoma Profile Analysis, December 18, 2013, accessed March 5, 2014
  23. American Council for an Energy-Efficient Economy, "Oklahoma" accessed March 24, 2014
  24. International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
  25. Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013
  26. U.S. Energy Department of Energy, "Alternative Fuel Technician Training," accessed March 5, 2014
  27. Oklahoma Farm Report, "Agricultural News," April 18, 2012
  28. American Council for an Energy-Efficient Economy, "Building Requirements,"accessed March 5, 2014
  29. The Oklahoma Corporation Commission, "Report on the Oklahoma Energy Security Act," accessed March 5, 2014
  30. Database of State Incentives for Renewables & Efficiency, "Requirements for Wind Development," October 1, 2012
  31. Oklahoma Corporation Commission, "Annual Report Fiscal Year 2012," accessed March 5, 2014
  32. Oklahoma State Energy Office, "State Energy Office,", accessed March 5, 2014
  33. Oklahoma University, "Energy Institute Home," accessed March 5, 2014
  34. Oklahoma State University, "National Energy Solution Institute," accessed March 5, 2014
  35. Oklahoma Clean Cities, "About Central OK Clean Cities," accessed March 5, 2014