By Traci Chapman/Staff Writer
published Jan. 3, 2009

Falling oil prices had a “domino effect” on Canadian County revenues in November, causing earnings to drop almost $200,000 off the county’s total income in October.

County Commissioners Phil Carson and Grant Hedrick said the fluctuation in crude oil prices have sparked major changes across the county. They said when prices were at an all-time highs earlier this year, drilling sites were going “full bore,” and some sites started operation where there had not been drilling in the past.

As the going rate for crude oil started plummeting during the fall, Hedrick said those wells have shut down.

“At one time from my house, I could see five wells going. Now those are all silent,” Hedrick said. “We have seen a drastic change in activity, which affects our income on several levels. As gross production falls, we also see a slowdown in fuel purchases by those (oil) companies, as well.”

According to the Web site for the Organization of the Petroleum Exporting Companies, crude oil prices hit a high of $141 per barrel in July, up from $92 per barrel in January. According to OPEC, the price for that same barrel was $34.69 as of Tuesday.

The county derives its income from diesel fuel and gasoline taxes, motor vehicle collections and gross production of crude oil, Carson said.

In October, county revenues from these sources added up to about $482,333; November’s total was just under $285,252. Figures for December will not be available until January, he said.

Carson said this will result in a slowdown in road and bridge improvement projects.

“We have several items that we must pay up front — debt service, payroll, things of that nature — and we can’t stop those payments,” he said. “If this trend continues, it will leave us in the minus as far as operating income goes.”

County Assessor Ronnie Funck said the impact could eventually hit property taxes, which are also a source of income not only for the county but also for school districts. Funck said Oklahoma is one of the few states not seeing a decrease in housing values, but there is no guarantee that would not happen across the state.

“If things don’t start turning around in the next few years, this could cause a drop in property values, and that could be a major hit,” Funck said. “We’re hoping the area doesn’t have a big drop because we never have experienced the inflated values some other states did.”

Carson said the only thing county officials can do at this point is just wait out the situation.

“We need to just make sure we have our belts tightened, and we have to just weather the storm,” he said. “In some ways we’re lucky — some other counties have it much worse than we do.”