EDITOR'S NOTE: This is the second of a two-part series by the New
York Times Service on economic problems of Oklahoma.
By Robert Reinhold ENID - All over Oklahoma, cities and towns are
discovering ""economic development.''
State officials believe salvation lies in taking advantage of
Oklahoma's central location in America, which makes it ideal for
distribution, warehousing, light manufacturing, food processing and
other industries dependent on transportation.
It is a strategy that has begun to work for Ardmore, a city of
25,000 in south central Oklahoma.
Since last year, the city's business leaders have pledged $1.4
million to the ""New Horizons'' strategy mounted by the Chamber of
Commerce. Under the plan, an old Air Force base has been reopened as
a 2,600-acre ""industrial airpark'' that has drawn several tenants
that furbish and paint airplanes.
Meanwhile, a new 135-acre industrial park has been developed and
the first tenant, Hardee's, the fast-food chain, is nearing
completion of a 65,000-square-foot building that will serve as its
food distribution center for the region. The hope is that this kind
of industry will spawn truck repair and other service businesses.
But diversification will not occur quickly. Oklahoma is very
young, having gained statehood only 79 years ago.
""It's practically impossible to diversify in that time,'' said
Robert B. Perry of the D.C. Bass Construction Co., based in Enid.
""They've got restaurants in New York that are older than
Oklahoma.Ups and downs are the history of our state. We're in a down
cycle, but we'll be up again.''
The great oil boom brought every sort of opportunist, phoney and
quick-buck artist to Oklahoma. It was a time when, as Holmes put it:
""Anybody with a sharp stick and a maiden aunt with some land was
an oil company.''
The first crack in the boom, in the early 80s, swept out the
slicksters, the J.R.s in their fast cars and fast planes who drank
beer out of cowboy boots.
But now even the most prudent, careful oil producers, who did not
get carried away in the frenzy, are having a tough time. Consider,
for example, Melvin Moran of Moran-Kahn Oil in Seminole.
For 40 years, the private family-run company, founded by his
immigrant father, has made a good living by buying small wells after
the majors lose interest in them. During the boom, Moran resisted
the temptation to buy drilling rigs or put on new staff and his debt
Yet at $13 a barrel, there is no profit in the oil that is pumped
from his wells.
The Moran picture is a reflection of the economic geology of
Oklahoma. The state has been so thoroughly pumped that 60 percent of
production comes from ""stripper'' wells that produce less than 10
barrels a day.
There are 82,000 such wells in Oklahoma, and nearly a quarter of
them will be abandoned if oil stays below $15 a barrel, according to
the Interstate Oil Compact Commission. Such wells cannot compete in
a world market in which Saudi Arabia can produce more oil from just
30 wells than Oklahoma can from 100,000.
The Anderson No. 1 well of the Moran Co., five miles north of
Seminole, is fairly typical. The well was drilled 30 years ago and
the ancient pumping jack labors day and night to squeeze out a meager
five or six barrels a day.
It is costly to operate because, like most Oklahoma wells, the oil
comes up mixed with brine, which must be separated and then disposed
of to avoid fresh-water contamination.
Gary A. Kleiman, Moran's son-in-law and manager, stood beside the
well and explained the unpromising economics:
- At current prices, the well grosses only $72 a day. Off the
top comes about $18 in royalties and production taxes to the state.
- Electricity alone takes another $30 a day, and after servicing
and repair costs are deducted, the well only breaks even. …