As oil prices continue to plummet, energy-producing states are starting to feel the squeeze. Wyoming crude is selling for half what it was in June. That price drop means companies are making less money -- and so is the state.
This year, for the first time in decades, severance taxes from oil surpassed coal and came close to knocking natural gas out of its number one spot, but now, with oil prices falling, Governor Matt Mead says the state is losing out on a lot of money.
“For every $5 decrease in a barrel of oil, it’s $35 million for the State of Wyoming,” he said. “I think we all have to be conscious of that as we make our recommendations on what the budget is this year, but even more so as we head into the budget session next year.”
Recent high oil prices and increased production have been a cushion for the state’s budget, largely offsetting flat and declining revenues from coal and natural gas. When the state put out its initial revenue estimates for the coming biennium in October, it estimated oil prices in 2015 of $85 a barrel. Most analysts now expect them to be considerably lower prices, closer to the mid-60s.