:Oklahoma Governor Mary Fallin says the low price of crude oil has left a major hole in the state budget. In terms of exploration and production interest, the state ranks second behind Texas. File photo by J.P. Wilson/UPI | License Photo
OKLAHOMA CITY, Jan. 6 (UPI) -- While emerging as a shale leader in the United States, the governor of Oklahoma said the state is facing 2016 with a major gap in its budget.
In a New Year message, Gov. Mary Fallin said there were many successes on the legislative front last year, from criminal justice to educational reforms.
"Despite these successes, Oklahoma still faces substantial challenges, particularly the state budget," she said in a statement.
According to federal data, Oklahoma oil reserves represent just over 3 percent of total U.S. supply. For October, the last full month for which the U.S. government has data, Oklahoma produced about 13 million barrels of oil.
If taken as a level of interest in exploration and production, data from oil services company Baker Hughes show Oklahoma ranks second behind Texas in terms of rigs actively looking for or churning out oil and natural gas.
Crude oil prices are starting 2016 lower, continuing a downward trend that began in mid-2014. West Texas Intermediate, the U.S. benchmark price for crude oil, is down about 1 percent for the year and closed 2015 off about 30 percent.
Lower energy prices are leaving gaps in the coffers of shale-rich states that have come to rely on oil and gas for revenue.
"It will take everyone working together to deal with a $900.8 million appropriated budget hole caused in large part by a 70 percent drop in oil prices over the past 18 months," Oklahoma's governor said.
The American Petroleum Institute, a lobbying group for the industry, touted Oklahoma as a shale pioneer in early 2015, saying its oil and gas production would put it in the top 20 percent of global producers if it were an independent nation.
In October, Fallin signed an executive order calling on all state agencies, boards and commissions to outline plans to cut non-essential expenses by 10 percent for the rest of the fiscal year and for the 2017 fiscal year, which begins July 1.