Oklahoma

Overview

Oklahoma is in the heart of the Mid-Continent oil region, a vast oil- and natural gas-producing area extending northward from Texas and flanked by the Mississippi River to the east and the Rocky Mountain states to the west. Crude oil and natural gas wells can be seen across much of Oklahoma, and some of the largest oil and natural gas fields in the country are found in the state. Eastern Oklahoma is also a coal-mining region. However, fossil fuels are not the state’s only energy resources. The open plains and low hills of the prairie cover most of Oklahoma, and the state has significant wind potential. Wind energy is providing an increasing share of Oklahoma’s electricity generation. With several rivers and large reservoirs, the state has substantial hydropower resources. Solar potential is also widespread and increases to the west across Oklahoma as sunny, arid conditions increase and precipitation decreases.

Oklahoma’s economy is diverse. The state is best known, however, for its energy-intensive petroleum and natural gas industries. Total energy consumption in the state is above the national median, and Oklahoma is in the top 10 states in energy use per capita. The electric power sector is the largest energy-consuming sector in Oklahoma, followed by the state’s industrial sector and then the transportation sector.

Renewable Energy

Oklahoma generates more than one-fifth of its electricity from renewable resources, mostly wind energy, but also from other renewable energy resources, particularly hydroelectric dams and, to a limited extent, biomass. The state is among the top producers of electricity from wind, ranking third in the nation in 2015. Oklahoma’s wind resource provided nearly one-fifth of the state’s electricity generation in 2015, and its contribution is increasing. In the 11-month period ending in November 2016, wind energy provided about one-fourth of Oklahoma’s electricity generation. The state had more than 5,400 megawatts of installed wind capacity in 2016, and nearly 1,200 megawatts more were under construction.

Many of the rivers that flow across Oklahoma have been dammed to form lakes, and the state has more man-made lakes than any other state in the nation. Those dams, and the rivers they restrict including the Neosho River, the Grand River, and the Arkansas River, are the sites of several hydroelectric power generation facilities. Hydroelectric power contributes varying amounts to the state’s electric grid, depending on river levels, precipitation, and drought, but, on average, it provides about 3% of the state’s annual net generation. The state has considerably more hydroelectric potential, and additional conventional and pumped hydroelectric facilities are in development.

Oklahoma’s legislature established a renewable energy goal for the state’s electric utilities in 2010. The goal was that 15% of the state’s total installed generation capacity be from renewable sources by 2015. A variety of renewable energy resources were allowed, including wind, solar, biomass, hydropower, geothermal, and hydrogen. Energy efficiency and demand-side management could be used to meet up to 25% of the overall goal. The goal did not extend beyond 2015. In 2013, the Oklahoma Corporation Commission reported that the state’s utilities had already exceeded the 2015 goal.

Electricity

Oklahoma ranked third in the nation in electricity generation from wind in 2015.

Oklahoma’s largest power plants are either coal- or natural gas-fired. Together, coal- and natural gas-fired power plants produce about three-fourths of the electric power generated in the state. In 2012, the amount of natural gas used for electricity generation in Oklahoma reached a record when it fueled about half of the state’s net generation. In recent years, the share of power generation fueled by coal has decreased as wind-powered generation has increased. By 2015, Oklahoma ranked third in the nation, behind Texas and Iowa, in electricity generation from wind. Although electric utilities provide much of the state’s electricity, independent power producers provide more than one-third of the state’s total power, and almost half of that share is generated from wind. A small share of Oklahoma’s electricity generation comes from hydroelectric power. Oklahoma does not have any nuclear power plants.

Oklahoma’s total electricity consumption per capita is higher than the national average and greater than in three-fourths of the states. Retail sales of electricity are higher in the residential sector, where more than one-third of Oklahoma households rely on electricity as their primary energy source for home heating than in the industrial, commercial, or transportation sectors

Natural Gas

Fourteen of the 100 largest natural gas fields in the United States are in Oklahoma. Proved natural gas reserves in the state peaked in 2014 at more than 34 trillion cubic feet. Oklahoma’s annual natural gas production reached an all-time high of nearly 2.5 trillion cubic feet in 2015.

The Hugoton—to—Chicago pipeline initiated the marketing of natural gas far from its source.

The Hugoton Gas Area is the largest natural gas field in Oklahoma and one of the largest natural gas fields in the United States, covering much of the Oklahoma panhandle, as well as parts of the Texas panhandle and Kansas.The initial development of the Hugoton natural gas reserves was hampered by lack of accessible markets. As a result, in 1931, construction of a 24-inch, high-pressure pipeline from the Hugoton Gas Area to Chicago area markets was completed, initiating long-distance pipeline transportation of natural gas. The ability to market natural gas far from where it was produced was a critical development in the creation of the modern natural gas industry. Today almost 20 major interstate natural gas pipelines cross the state.

Oklahoma also has substantial shale gas and coalbed methane resources. In 2015, Oklahoma was the fifth-largest shale gas-producing state, and its proved reserves are substantial. Oklahoma produced more than 4.5 trillion cubic feet of natural gas from shale between 2007 and 2015, and production has been steadily increasing. Oklahoma also has coalbed methane resources in the eastern part of the state. More than 650 billion cubic feet of natural gas have been produced from Oklahoma coalbeds since 2005. In 2015, the remaining proved reserves were about half the amount that had already been extracted.

Almost half of the natural gas delivered to consumers in Oklahoma is used for electric power generation. The industrial sector consumes slightly more than one-third of end-use deliveries. Although more than half of Oklahoma households use natural gas for home heating, the residential sector accounts for only about one-ninth of the natural gas delivered to consumers in the state. In addition to end-use consumption, a substantial amount of natural goes for lease, plant, and pipelines use. Typically, more than one-fourth of Oklahoma’s natural gas production is consumed within the state. The remaining supply is sent through Kansas, Texas, Arkansas, and Missouri on its way to other markets. In 2015, almost three times as much natural gas flowed out of Oklahoma as flowed into the state.

Source: U.S. Energy Information Administration (Feb 2017)