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THE ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY
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RegionTrack, Inc. (regiontrack.com) is an Oklahoma City-based economic research firm specializing in regional economic forecasting and analysis. Principal authors of the report are RegionTrack economists Mark C. Snead, Ph.D. and Amy A. Jones, M.A. PREPARED BY
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TABLE OF CONTENTS Introduction and Key Findings __________________________________________________________________________ 1 Economic Role of the Oklahoma Aggregate Industry ________________________________________________ 1 Key Findings ____________________________________________________________________________________________ 1 I. Defining Oklahoma’s Aggregate Industry ____________________________________________________________ 4 Defining Aggregate _____________________________________________________________________________________ 4 The Market for Aggregate Materials __________________________________________________________________ 5 Geological Formations _________________________________________________________________________________ 6 Measuring the Economic Size of the Aggregate Industry ___________________________________________ 7 II. Oklahoma Aggregate Industry Production _________________________________________________________ 10 Aggregate Production in Oklahoma _________________________________________________________________ 10 III. Economic Contribution of the Oklahoma Aggregate Industry ___________________________________ 27 Measuring the Industry’s Economic Contribution _________________________________________________ 27 Economic Summary of the Oklahoma Aggregate Industry ________________________________________ 28 Economic Trends in the Oklahoma Aggregate Industry ___________________________________________ 31 County-Level Aggregate Industry Activity _________________________________________________________ 35 Comparable Industries ______________________________________________________________________________ 39 IV. Gross Economic Contribution – Oklahoma Aggregate Industry _________________________________ 41 Modeling Regional Economic Linkages _____________________________________________________________ 41 Gross Economic Contribution of the Aggregate Industry _________________________________________ 41 V. Tax Contributions of the Aggregate Industry _______________________________________________________ 44 State Tax Contribution _______________________________________________________________________________ 44 Sales and Use Tax Payments – State and Local _____________________________________________________ 46 City- and County-Level Sales and Use Tax Payments ______________________________________________ 47 Local Ad Valorem Tax Revenue ______________________________________________________________________ 49 VII. Endnotes ____________________________________________________________________________________________ 52
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TABLE OF FIGURES Figure 1. Oklahoma Aggregate Production by Type and Share ..................................................................... 11 Figure 2. Oklahoma Total Aggregate Production (2009-2019) ..................................................................... 12 Figure 3. Oklahoma Aggregate Production Share by Major Group .............................................................. 14 Figure 4. Oklahoma Aggregate Production by Type and County (2019) .................................................. 16 Figure 4. (Continued) Oklahoma Aggregate Production by Type and County (2019) ........................ 17 Figure 5. Top Producing County by Aggregate Type and Share (2019) ..................................................... 18 Figure 6. Oklahoma Aggregate Production by Individual Site and Production ...................................... 20 Figure 7. Oklahoma Aggregate Production by Aggregate Type and Annual Volume (2019) ............ 22 Figure 8. 50 Largest Aggregate Producers in Oklahoma.................................................................................. 24 Figure 9. Top 50 Aggregate Producing Locations in Oklahoma – Annual Tonnage (2019) ............... 26 Figure 10. Oklahoma Aggregate Industry Economic Summary (2020) ..................................................... 28 Figure 11. Economic Profile of the Oklahoma Aggregate Industry by Sector ......................................... 30 Figure 12. Oklahoma Aggregate Industry – Economic Profile ....................................................................... 31 Figure 13. Average Compensation per Worker – Aggregate Industry vs. State ...................................... 32 Figure 14. Oklahoma Aggregate Industry Performance – Other Metrics .................................................. 33 Figure 15. Oklahoma Aggregate Industry Non-Employers Trends ............................................................. 34 Figure 16. Oklahoma Aggregate Industry – County Profile ............................................................................ 36 Figure 16. (Continued) Oklahoma Aggregate Industry – County Profile .................................................. 37 Figure 17. Gross Domestic Product in Comparable Oklahoma Industries ............................................... 40 Figure 18. Gross Economic Contribution - Oklahoma Aggregate Industry (2020) ............................... 42 Figure 19. Estimated State Tax Effects from Aggregate Industry Operations (2020).......................... 44 Figure 20. Estimated Non-Coal Mineral Production Fees................................................................................ 45 Figure 21. Sales and Use Tax Base and Remittances – Aggregate Industry ............................................. 46 Figure 22. City and County Sales/Use Tax Payments – Oklahoma Aggregate Industry ...................... 48 Figure 23. Ad Valorem Tax Payments – 50 Largest Producing Sites ........................................................... 50
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 1 Introduction and Key Findings Economic Role of the Oklahoma Aggregate Industry The goal of this report is to aid state policymakers and the public in better understanding the structure and various economic contributions of Oklahoma’s aggregate producing industry. Aggregate materials, which include primarily limestone, granite, and sand and gravel, are widely used but not highly visible to the public. The economic role played by the aggregate industry in the state economy also remains largely unknown and has received little study from an economic perspective. In evaluating the economic role of the Oklahoma aggregate industry, the analysis in the report is structured around answering six core questions: 1. What is the state’s aggregate industry and how is it structured? 2. What types and quantities of aggregate materials are produced in Oklahoma? 3. How large is the industry, who are the key participants, and where is it located? 4. What are the direct economic contributions of the industry to the state and to local economies? 5. What spillover economic effects are generated by the operations of the industry? 6. What are the tax contributions produced by the aggregate industry? Key Findings Key findings from the report are as follows: 1. In 2019, 341 companies reported production of aggregate material in Oklahoma. 2. The aggregate industry produced 81.5 million tons of material at 417 sites across the state. 3. Oklahoma’s aggregate production is highly concentrated in just four aggregates – limestone, sand and gravel, granite, and gypsum. These four materials comprise approximately 95% of total state aggregate production. 4. The production of aggregate material in Oklahoma is up 25% the past decade (2.3% annual growth). 5. The production of aggregate material is widespread across Oklahoma, occurring in 71 of 77 counties in 2019. However, production is highly concentrated in the 20 largest producing counties. Each produced more than 1 million tons of aggregate in 2019 and jointly accounted for 81% of total state production. 6. Aggregate production in Oklahoma is highly concentrated in the non-metropolitan counties of the state. In 2019, 71% of production originated in the state’s 58 non-metro counties. The remaining 29% of production occurred in the state’s 19 metropolitan area counties. 7. Total state aggregate production is highly concentrated among the top 50 producers who jointly accounted for more than 90% of total state output in 2019. The top four producers accounted for nearly half of all state aggregate production in 2019. The top 25 producers accounted for more than 80% of state production. 8. The top 50 individual producing sites accounted for 76.5% of total state output in 2019, or 62.3 million tons of production.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 2 9. Based on federal and state economic databases, 293 Oklahoma business establishments were primarily engaged in aggregate production in 2020. These establishments include 174 employers with wage and salary employees and 119 nonemployer firms. 10. The industry is comprised of a relatively small number of large producing firms and a large number of relatively small firms. Only 20 firms across the state produced more than 1 million tons of aggregate in 2019. More than half of all firms extracted less than 25,000 tons of aggregate in 2019. 11. Overall, the state’s largest aggregate producers are dominant in granite, gypsum, limestone, and sand and gravel production. Mid-size producers account for most of the production of clay, dimensional stone, salt, and chat. Small producers account for most of the production of caliche, select fill, shale, and tripoli. 12. Aggregate industry revenue totaled $719 million in 2020, an increase of 84% the past decade (6.3% annual growth). 13. The industry employed nearly 2,400 workers who earned $179 million in compensation in 2020. 14. Employment in the industry increased 26% the past decade while total compensation paid to workers nearly doubled (98% gain). 15. Industry compensation of $74,675 per worker is almost 20% higher than the overall state average of $62,523. Compensation per worker in the aggregate industry increased at nearly double the pace of overall state compensation the past decade (57% vs. 29%). 16. The typical establishment in the aggregate industry remains relatively small with an average of about 14 employees, little changed since 2004. Total compensation per establishment increased 59% between 2010 and 2020, now totaling just more than $1 million. 17. Firm size as measured by revenue per establishment has risen 50% since 2010, reaching approximately $4.1 million in 2020. The rise in average revenue per establishment reflects a similar 48% increase in revenue per employee since 2010, reaching $295,520 in 2020. 18. Employment and wages in the aggregate industry are reported in 68 of the state’s 77 counties in 2020. 19. A core group consisting of seven counties report more than 100 workers in the aggregate industry. Johnston County has the largest employment base with 233 workers, followed by LeFlore (230 jobs), Oklahoma (191 jobs), Murray (167 jobs), Haskell (137 jobs), Pontotoc (110 jobs), and Kiowa (106 jobs) counties. These same seven counties produced the largest amount of total employee compensation among the counties, ranging from $18.9 million in Johnston county to $8.7 million in Kiowa county in 2020. 20. As a share of total county employee compensation, the aggregate industry accounts for 14.0% of compensation in Johnston, 9.7% in Kiowa, 7.6% in Haskell, 5.2% in Murray, and 2.7% in Le Flore. In total, 12 Oklahoma counties generate more than 1% of total local employee compensation from aggregate industry jobs. 21. Average compensation at the county level ranges from a low of $34,018 to a high of $88,363. Wages in the state’s metropolitan areas are only marginally higher than in the nonmetropolitan areas. 22. Relative to comparable industry sectors in Oklahoma, aggregate industry GDP of $663 million is only slightly smaller than that found in the Warehousing and storage sector ($765.8 million) and the Securities, commodities, and financial investment services sector ($751.7 million). GDP in the aggregate sector exceeds that produced in Motor vehicles, bodies and trailers, and parts
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 3 manufacturing ($650.7 million); Performing arts, spectator sports, museums, and related activities ($645.1 million); and Computer and electronic product manufacturing ($623.7 million). 23. Estimated gross economic impacts suggest that the state’s aggregate industry supported an estimated $1.3 billion in total state output, 8,450 total jobs, and $457 million in total employee compensation in 2020. 24. Each dollar of direct output within the aggregate industry supported an additional $0.84 in estimated economic output statewide. Each dollar of direct earnings by aggregate industry employees supported an additional $1.56 of household earnings statewide. Each direct job in the aggregate sector supported 2.5 additional jobs in the state economy. 25. Total expected state tax revenue generated by the gross economic contribution of the aggregate industry reached $48.9 million in 2020. 26. Based on 2019 production of 81.45 million tons of aggregate, the state’s fee on aggregate production is expected to generate an estimated $1 million annually to the Oklahoma Department of Mines. 27. In 2020, the state’s aggregate producers reported sales subject to state sales and use tax of $127.8 million. Aggregate producers remitted an estimated $8.79 million in sales and use tax receipts to state, city, and county governments in Oklahoma. Of the total, $5.75 million (65%) went to the state, $2.0 million (23%) to cities, and $1.0 million (12%) to counties. 28. In 2020, sales and use tax payments totaling $3.0 million were remitted to city and/or county governments in 75 of the state’s 77 counties. 29. Ad valorem tax payments for the 50 largest producing sites in Oklahoma totaled an estimated $6.42 million in tax year 2020.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 4 I. Defining Oklahoma’s Aggregate Industry This report examines the size, structure, and economic contribution of Oklahoma’s aggregate-producing industry. Although the industry’s activities and the minerals it produces are not highly visible to the public, its products are widely used, particularly in critical construction and transportation-related applications. This initial section of the report provides a description of the aggregate industry, its range of products, and the geology underlying the materials produced in Oklahoma. Defining Aggregate The term aggregate is used throughout the report to denote a range of inert, nonmetallic materials or minerals produced from natural sources that are used primarily in building and construction. The most common types of aggregate in Oklahoma and in most states are granite, limestone, and sand and gravel. Aggregate material is extracted from a mine, quarry, pit, or other natural deposit. After extraction, the material is typically prepared in some manner (e.g., sorted, graded, crushed, cleaned, washed, etc.…) and then measured or weighed for sale in volume and transported by truck, trailer, or train. Aggregates are then used either in raw form or as in input to other end-use products such as wet concrete and hot asphalt. Oklahoma’s Key Aggregates. The aggregates covered throughout the report include those requiring a production permit1 from the Oklahoma Department of Mines (ODOM). ODOM regulates mine safety in the state and reports production on an ongoing basis.2 Coal production is excluded from the analysis along with other fuel-type natural materials such as peat. ODOM reports production of 14 non-coal aggregate materials in Oklahoma the past decade. These materials include limestone, sand and gravel, granite, gypsum, clay, dimensional stone, select fill, shale, salt, chat, tripoli, caliche, volcanic ash, and dolomite.3 Both salt and dimension stone are not universally viewed as aggregate material but are permitted and tracked by ODOM and included in the report. Combined, the two materials comprise less than 2% of total state aggregate production tonnage in 2019 (dimensional stone 1.3% and salt 0.2%) Other minerals that require a permit to mine but are no longer produced in Oklahoma include lead, zinc, copper, iron, manganese, titanium, and uranium.4 Many of these discontinued materials are metallic ores that are produced primarily in other states or countries. Finally, precious and semi-precious stones are not mined commercially in Oklahoma and are excluded from the analysis.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 5 The Market for Aggregate Materials There are several economic characteristics of the Oklahoma aggregate market that provide helpful context when reviewing the remainder of the report: 1. The goods-producing sectors of the state economy including construction, manufacturing, and agriculture are closely tied to the aggregate sector. 2. The aggregate sector plays a critical role in providing key input materials for the construction of roads, buildings, bridges, dams, flood control, septic fields, and as backfill, as well as use in other construction projects. 3. Aggregate materials are also used as a direct input to numerous other end-use products such as asphalt, bricks, countertops, construction blocks, Portland cement, roofing shingles, frac sand for the oil and gas drilling industry, and filter sand for water treatment plants. 4. The aggregate industry is tied to the physical location of the minerals and has limited ability to change the location of supply in response to changing market conditions. 5. The locally sourced nature of the industry insulates it, to a degree, from out-of-region and international competition. 6. The market for aggregate material can be highly localized in a small regional area, particularly for widely used items such as limestone and sand and gravel. 7. Aggregate materials typically have very low cost in small quantities; hence, they are sold in large quantities, frequently measured in tonnage. 8. Transportation costs are a major component of the price of aggregate and can exceed the direct cost of the aggregate when transported long distances. 9. Local truck transportation is closely intertwined with aggregate production and delivery. 10. Aggregate materials are not generally sold directly to small retail customers through traditional channels but are instead sold in quantity to construction firms, governments, landscapers, or other large users and resellers. 11. The state’s concrete and asphalt producers are closely tied to aggregate production by geography, with many firms vertically integrated. Key End-Use Products – Concrete and Asphalt. Both ready-mix concrete and hot-mix asphalt are key end- use products derived primarily from a mixture of aggregate. Many of the state’s aggregate producing firms produce concrete and asphalt as value-added products. Concrete and asphalt are key inputs to a range of construction and transportation-related projects. In Oklahoma, these activities are performed by private construction, landscaping, and engineering firms; state entities such as the Oklahoma Department of Transportation (ODOT); and counties and municipalities across the state. Concrete is used in projects ranging from residential and nonresidential construction to roads, driveways, and numerous specialized applications. The concrete industry is highly dependent upon aggregate material, with 60-75% of the total volume of concrete comprised of aggregate material, primarily in the form of sand, crushed stone, and gravel.5 Concrete production occurs statewide using a network of concrete plants that rely upon a steady supply of material from the state’s aggregate industry. ODOT
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 6 currently uses 102 approved and inspected concrete plants located across the state.6 About three-fourths of the plants are permanent (78) while the remainder (24) are portable and used at the jobsite. Aggregates similarly comprise 75-80% of the volume of hot-mix asphalt, which is used to cover 90% of the nation’s paved roads and highways.7 Asphalt plants located across the state provide aggregate-based paving materials primarily for public (state, county, and municipal) and private roadway and related projects. ODOT currently contracts with 54 approved asphalt plants located in the state that hold a current inspection status.8 Among these plants, 35 are in permanent locations while 19 are portable for on-site mixing. Geological Formations. Oklahoma is endowed with a diverse mix of minerals for use as aggregate materials. The actual production mix reflects both the diverse supply of mineral deposits native to the state and the demand for aggregates in the state. Four major geological formations are responsible for much of the natural aggregate material produced in Oklahoma:9 Arbuckle Mountains – in south central Oklahoma stretching across Pontotoc, Garvin, Murray, and Johnston counties, the mineral-rich area is home to extensive commercial deposits of limestone, granite, dolomite, silica sand, and other materials. Ozark Uplift – in northeast Oklahoma primarily in Cherokee, Ottawa, Adair, and Delaware counties, the region has substantial limestone and unique tripoli10 deposits. Wichita Mountains – in southwest Oklahoma located primarily in Kiowa, Comanche, Caddo, and Greer counties, the range has significant limestone and granite deposits. Ouachita Mountains – in the southeast Oklahoma counties of Pushmataha, Le Flore, Latimer, Atoka, and McCurtain, deposits in the region include large deposits of limestone and dimensional stone. Beyond these four formations, sand and gravel deposits are dispersed across most areas of the state along streams and riverbeds. Broad deposits of salt, which form the state’s salt plains, are found across much of northwest and southwest Oklahoma. Significant gypsum deposits are found in west central and northwest Oklahoma. Caliche11 is found in Ellis and Texas Counties in and near the Panhandle. Volcanic ash deposits are highly concentrated in ancient volcanic fields in the Panhandle but are found statewide.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 7 Measuring the Economic Size of the Aggregate Industry While the volume of aggregate material produced in Oklahoma is tracked and reported by ODOM, estimates of the economic size of the aggregate industry require the extraction of economic data from state and federal databases. This entails identifying the individual segments of the aggregate industry based on widely used NAICS codes. Mining. The core of the aggregate industry is tied primarily to mining and quarrying activities. The NAICS classification system identifies five major groupings of mining operations in North America: 1. NAICS 2111 – Oil and gas extraction 2. NAICS 2121 – Coal mining 3. NAICS 2122 – Metal ore mining 4. NAICS 2123 – Non-metallic mineral mining and quarrying, and 5. NAICS 2131 – Support activities for mining The report focuses on NAICS 2123 (non-metallic minerals) and the portion of NAICS 2131 (support activities) related to non-metallic minerals. Fuel-type commodities such as crude oil, natural gas, and coal (NAICS 2111 and 2121) are generally viewed as distinctly separate mining activities and their economic role has been examined in depth in Oklahoma for many years. Metal ores (NAICS 2122), or metallic minerals, were mined in the state in years past (e.g., zinc, lead, and iron ores) but are no longer produced commercially. Within NAICS 2123 and 2131, the following nine 6-digit NAICS codes are used throughout the report to assemble economic data on the mining and quarrying activities of the industry from federal and state databases:12 o NAICS 212311 - Dimension Stone Mining and Quarrying o NAICS 212312 - Crushed and Broken Limestone Mining and Quarrying o NAICS 212313 - Crushed and Broken Granite Mining and Quarrying o NAICS 212319 - Other Crushed and Broken Stone Mining and Quarrying o NAICS 212321 - Construction Sand and Gravel Mining o NAICS 212322 - Industrial Sand Mining o NAICS 212325 - Clay and Ceramic and Refractory Minerals Mining o NAICS 212399 - All Other Nonmetallic Mineral Mining o NAICS 213115 - Support Activities for Nonmetallic Minerals (except Fuels) Mining These sectors are commonly referred to jointly as the nonmetallic mineral mining sector. For brevity in presentation throughout the report, the nine sectors above are referred to using the following shortened versions of their official NAICS descriptions: Dimension Stone, Limestone, Granite, Other Stone, Sand and Gravel, Industrial Sand, Clay and Ceramic, All Other Nonmetallic Minerals, and Support Activities. Wholesale Trade. In addition to the mining components of the industry, two additional 6-digit sectors in wholesale trade are directly related to the sale of aggregate material:
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 8 o NAICS 423320 - Brick, Stone, and Related Construction Material Merchant Wholesalers o NAICS 423520 - Coal and Other Mineral and Ore Merchant Wholesalers Most of the sales in the aggregate industry take place directly between producer and end-user, including physical delivery. However, wholesalers play a vital role in the distribution of aggregate material to end- users across the state. The two wholesale trade sectors are far broader in scope than the nine narrowly defined 6-digit nonmetallic mineral sectors described above in NAICS 2123 and 2131 and include products beyond nonmetallic minerals. Because wholesale activity in these two sectors is not fully attributable to the aggregate industry, a share of the sector’s activity is apportioned to nonmineral mining as follows: NAICS 423320 – Brick, Stone, and Related Construction Material Merchant Wholesalers. NAICS 423320 includes wholesale trade activity for a range of construction materials. Along with the traditional aggregates of crushed stone, building stone, gravel, sand, and clay, NAICS 423320 includes wholesale trade in asphalt, bricks, building blocks, cement, concrete, drywall, paving mixtures plaster, clay tile, stucco, concrete septic tanks, terra cotta, and other products. Given the range of products included in NAICS 423320, our estimate is that the aggregate sector in Oklahoma is likely to comprise no more than 20-30% of total activity in the industry. Hence, we assign the midpoint of 25% of the wholesale activity in the sector to the aggregate industry. NAICS 423520 – Coal and Other Mineral and Ore Merchant Wholesalers. NAICS 423520 includes wholesale activity only in coal-related production, metallic minerals, and nonmetallic minerals. The limited range of products included makes is far easier to apportion the share of industry activity traced to nonmetallic minerals. In Oklahoma, there is believed to be little contribution to NAICS 423520 from wholesale coal-related activity for two reasons. First, most coal activity is captured in NAICS 2121, and second, there is now relatively little coal mining activity in the state. There is also no meaningful amount of metallic mineral mining in the state. Hence, a very high percentage of the wholesale activity in NAICS 423520 is traced to nonmetallic mineral mining. Other products are believed to represent no more than 10-20% of the activity taking place in NAICS 423520. Hence, we use the midpoint and assign 85% of the wholesale activity in the sector to the aggregate industry. The two wholesale trade sectors are referred to throughout the report using the following shortened versions of their official NAICS descriptions: Construction Materials-Wholesale and Minerals-Wholesale.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 9 Aggregate Industry Definition. The remainder of the report examines the state’s aggregate sector using the nine nonmetallic mineral mining sectors in NAICS 2123 and 2131 along with portions of the two wholesale trade sectors related to nonmetallic mineral mining. These eleven sectors are believed to capture the great majority of all relevant direct aggregate industry activity in the state. These sectors are also believed to capture little activity not considered aggregate mining. Excluded from the measure are numerous industry sectors that are closely tied to the aggregate industry through supplier and customer channels but are not a direct component of the industry itself. These relationships are examined in a later section of the report that measures economic spillover effects resulting from direct activity in the industry. Industry Classification Issues. When identifying the various NAICS components of a particular industry in public databases, there are common challenges faced in capturing the full presence of an industry. The most important of these are: 1) firm misclassification – activity is misclassified outside the intended industry sector. This happens for two primary reasons. First, the activity is simply reported using the wrong industry code. Second, firms are classified in another NAICS industry sectors because it is not their primary line of business; and 2) regional misclassifiction – firms are classified in the wrong region. This can occur when out-of- state firms operating in the state are not captured in Oklahoma data; or firms with operations in one Oklahoma county report the activity as being based in another county. These two data classification issues are quite common when examining small industry sectors or small regional economies and are noted in the report where it is believed they may be influencing the reliability of the data.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 10 II. Oklahoma Aggregate Industry Production Aggregate Production in Oklahoma This section of the report provides a comprehensive overview of the types, quantities, and production location of aggregate material produced in Oklahoma. Also examined are the largest aggregate producing firms operating in the state and the largest individual aggregate producing sites. Types of Aggregate Production. Figure 1 summarizes the annual production of aggregate materials in Oklahoma in the decade from 2009 to 2019. In 2019, Oklahoma producers reported total production of 81.45 million tons of aggregate material. Production is highly concentrated among just four aggregates – limestone, sand and gravel, granite, and gypsum. These four materials comprise approximately 95% of total state aggregate production in 2019. Limestone. The most produced material is limestone, totaling 42.5 million tons, or slightly more than half (52.2%) of all production in the state. Crushed limestone is commonly used as aggregate in the production of concrete. Sand and Gravel. Sand and gravel comprise the second largest category with 19.3 million tons (23.6%) in 2019. Sand and gravel are used to make concrete and asphalt, for road construction, as construction fill, and in the production of other construction materials including concrete blocks and bricks. Granite. Granite is the third most produced aggregate in Oklahoma with 9.6 million tons (11.8%) in 2019. It is used in numerous construction applications including asphalt, ballast for railroad tracks, landscaping, drainage, walkways, driveways, monuments, and grave markers. Gypsum.13 Gypsum production ranks fourth in 2019 with 5.3 million tons (6.5%). Gypsum produced in Oklahoma is used primarily for wallboard, roadbed, and in concrete production along with cement. Food- grade gypsum produced in Oklahoma is used as a calcium supplement in foods (e.g., bread and dough) and beverages (typically beer and wine). All Other Aggregates. The remaining ten aggregates – clay, dimensional stone, select fill, shale, salt, chat, tripoli, caliche, volcanic ash, and dolomite – totaled less than 5 million tons in combined production in 2019, or 5.8% of total state production. Production of fourth-ranked gypsum exceeded the combined production of the remaining ten aggregates in 2019. Not all tracked aggregate materials are produced each year. Dolomite was produced in the state from 2014 to 2017 but none was produced in either 2018 or 2019. Volcanic ash has been produced only periodically and in small quantities the past decade, with none produced since 2014.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 11 Figure 1. Oklahoma Aggregate Production by Type and Share Aggregate 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual Production (tons) Limestone 39,159,686 41,703,789 38,619,920 31,761,092 40,950,503 46,118,855 47,420,355 48,265,197 40,580,727 41,976,859 42,544,765 Sand & Gravel 15,555,930 16,136,616 15,525,413 18,614,850 16,063,874 17,723,592 16,174,880 16,712,925 16,040,334 18,071,628 19,255,178 Granite 4,779,525 4,557,052 4,625,498 3,291,307 4,387,976 2,700,588 4,954,479 5,028,992 8,924,303 8,537,499 9,629,110 Gypsum 2,842,591 3,373,936 5,482,983 5,804,842 5,354,300 5,412,051 4,722,359 5,250,920 5,795,606 6,632,023 5,280,332 Clay 1,266,600 1,245,988 992,170 2,255,864 1,455,844 1,305,098 1,550,241 1,515,538 2,298,253 1,974,326 1,661,423 Dimensional Stone 398,329 401,738 435,430 2,052,095 519,149 913,939 730,537 664,332 1,496,232 1,347,319 1,121,896 Select Fill 228,752 685,146 463,250 1,237,479 772,590 1,376,047 1,470,280 1,551,154 1,575,876 1,028,472 1,020,763 Shale 279,427 774,473 517,593 2,090,791 443,412 539,861 565,436 939,587 558,327 547,639 566,829 Salt 155,764 95,928 130,761 195,982 133,120 159,096 167,655 131,797 150,350 132,448 166,037 Chat 264,836 286,123 315,260 220,304 301,240 365,017 321,166 241,041 178,045 109,412 142,777 Tripoli 37,661 51,520 33,973 180,766 84,052 58,065 32,781 23,000 43,097 32,177 50,269 Caliche 4,595 107,423 148,324 129,348 2,615 6,683 134,034 25,030 60,962 38,232 6,246 Volcanic Ash 240 400 800 - 730 450 - - - - - Dolomite - - - - - 185,667 184,318 163,511 264,522 - - Total 64,973,936 69,420,132 67,291,375 67,834,720 70,469,405 76,865,009 78,428,521 80,349,513 77,702,112 80,428,034 81,445,625 Share of Annual Production Limestone 60.3% 60.1% 57.4% 46.8% 58.1% 60.0% 60.5% 59.9% 52.0% 52.2% 52.2% Sand & Gravel 23.9% 23.2% 23.1% 27.4% 22.8% 23.1% 20.6% 20.8% 20.6% 22.5% 23.6% Granite 7.4% 6.6% 6.9% 4.9% 6.2% 3.5% 6.3% 6.2% 11.4% 10.6% 11.8% Gypsum 4.4% 4.9% 8.1% 8.6% 7.6% 7.0% 6.0% 6.5% 7.4% 8.2% 6.5% Clay 1.9% 1.8% 1.5% 3.3% 2.1% 1.7% 2.0% 1.9% 2.9% 2.5% 2.0% Dimensional Stone 0.6% 0.6% 0.6% 3.0% 0.7% 1.2% 0.9% 0.8% 1.9% 1.7% 1.4% Select Fill 0.4% 1.0% 0.7% 1.8% 1.1% 1.8% 1.9% 1.9% 2.0% 1.3% 1.3% Shale 0.4% 1.1% 0.8% 3.1% 0.6% 0.7% 0.7% 1.2% 0.7% 0.7% 0.7% Salt 0.2% 0.1% 0.2% 0.3% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% Chat 0.4% 0.4% 0.5% 0.3% 0.4% 0.5% 0.4% 0.3% 0.2% 0.1% 0.2% Tripoli 0.1% 0.1% 0.1% 0.3% 0.1% 0.1% 0.0% 0.0% 0.1% 0.0% 0.1% Caliche 0.0% 0.2% 0.2% 0.2% 0.0% 0.0% 0.2% 0.0% 0.1% 0.0% 0.0% Volcanic Ash 0.0% 0.0% 0.0% - 0.0% 0.0% - - - - - Dolomite - - - - - 0.2% 0.2% 0.2% 0.3% - - Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Notes: Excludes coal and other fuel-type minerals Source: Oklahoma Department of Mines and RegionTrack calculations
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 12 Trend in Aggregate Production. Total aggregate production measured in tonnage has remained in a steady uptrend much of the past decade, rising by a cumulative 25% (2.3% annually) in the period (Figure 2). The reported 81.45 tons produced in 2019 is up 16.47 tons from 64.97 million tons produced in 2009. The uptrend in total production was interrupted in only two years - 2011 and 2017 - the past decade. Production in both years was affected primarily by volatility in the output of limestone, the state’s primary aggregate. The 3% pullback in overall state production in 2011 is traced to a steep 7.5% pullback in limestone production that was offset in part by a simultaneous rise in both gypsum and sand and gravel output. Weakness in total state output in 2017 was again traced to a more than 15% drop in limestone production, a reversal of record limestone production posted in 2016. A more than 75% rise in granite production softened the effect of the pullback in limestone output in 2017. Figure 2. Oklahoma Total Aggregate Production (2009-2019) Source: Oklahoma Department of Mines 64.97 69.42 67.29 67.83 70.47 76.87 78.43 80.51 77.97 80.43 81.45 0 10 20 30 40 50 60 70 80 90 100 09 10 11 12 13 14 15 16 17 18 19 Million tons
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 13 Changing Production Share. The relative shares of production among the state’s aggregates continue to shift over time, reflecting changing market demand. Figure 3 provides a summary of both production volume and share of total production over the 2009 to 2019 period for the top four aggregates and a fifth group combining the remaining ten aggregates. Limestone has long served as the state’s top aggregate but dropped from a 60% share of total production in 2016 to only 52% in 2017 and has remained at the same approximate level through 2019. Sand and gravel continue as a distant second in production to limestone. Sand and gravel production increased sharply by volume in 2018 and 2019 to all-time highs but remains within the historical range of 20-24% of total production maintained since 2013. Granite only recently moved ahead of gypsum as the third ranked aggregate, with granite’s share of production nearly doubling in 2017 to 11.5%. Granite’s share has increased slowly since 2017, reaching 11.8% in 2019. Granite production has assumed much of the former share held by limestone. Gypsum currently has a 6.5% share of total state output, near the low end of its range the past decade. The group of ten remaining smaller aggregates continues to comprise its historical share of approximately 5% of total state production. Large year-to-year shifts have taken place among the remaining individual aggregates, but as a group they exert little influence on total state production. Shifts among them include a steep upward shift in select fill production beginning in 2012 and a significant downshift in chat production since 2016. Considerable year-to-year volatility is also present in the production of clay, dimensional stone, and shale. Salt remains highly steady over time with roughly 150,000 tons produced annually. Tripoli, caliche, volcanic ash, and dolomite remain very small shares of total state production and have no measurable influence on overall state production. to
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 14 Figure 3. Oklahoma Aggregate Production Share by Major Group Production in million tons Share of total production Source: Oklahoma Department of Mines and RegionTrack calculations 39.2 41.7 38.6 31.8 41.0 46.1 47.4 48.3 40.6 42.0 42.5 15.6 16.1 15.5 18.6 16.1 17.7 16.2 16.7 16.0 18.1 19.3 4.8 4.6 4.6 3.3 4.4 2.7 5.0 5.0 8.9 8.5 9.6 2.8 3.4 5.5 5.8 5.4 5.4 4.7 5.3 5.8 6.6 5.3 2.6 3.6 3.0 8.4 3.7 4.7 5.0 5.1 6.4 5.2 4.7 0 10 20 30 40 50 60 70 80 90 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Million tons Limestone Sand and Gravel Granite Gypsum Other Aggregates 60.3% 60.1% 57.4% 46.8% 58.1% 60.1% 60.6% 60.1% 52.2% 52.2% 52.2% 23.9% 23.2% 23.1% 27.4% 22.8% 23.1% 20.7% 20.8% 20.6% 22.5% 23.6% 7.4% 6.6% 6.9% 4.9% 6.2% 3.5% 6.3% 6.3% 11.5% 10.6% 11.8% 4.4% 4.9% 8.1% 8.6% 7.6% 7.1% 6.0% 6.5% 7.5% 8.2% 6.5% 4.1% 5.3% 4.5% 12.3% 5.3% 6.2% 6.4% 6.3% 8.2% 6.5% 5.8% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Limestone Sand and Gravel Granite Gypsum Other Aggregates
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 15 Aggregate Production by Type and County. Figure 4 provides a breakdown of aggregate production by type within each Oklahoma county in 2019. The production of aggregate material is widespread across Oklahoma, occurring in 71 of 77 counties. However, production is highly concentrated in the 20 largest producing counties. Each produced more than 1 million tons of aggregate in 2019 and jointly accounted for 66.3 million tons of aggregate, or 81% of total state production. Most of the major producing counties produce primarily either limestone, sand and gravel, granite, or gypsum, (or a combination of) the four major aggregates produced in Oklahoma. Johnston (13.9 million tons) and Murray (8.1 million tons) counties are the two largest aggregate producing counties by a substantial margin. Jointly they produced more than one-fourth of total state aggregate output in 2019. Johnston County is the state’s top granite producing county, third largest limestone producer, and second largest producer of sand and gravel. Murray county is the largest limestone producing county, with limestone the only aggregate sourced in the county. Sand and gravel are extracted in most producing counties for local and regional use, with production occurring in 52 of the state’s 77 counties. Again, sand and gravel deposits are widespread across Oklahoma along streams and riverbeds. Limestone, which comprises half of all state aggregate production, is the second most widely mined aggregate across the state with deposits and production located in 34 counties. However, a group of nine counties produced 79% of total state limestone in 2019. Production of the remaining aggregates was far more concentrated in a small number of counties in 2019. Select fill was produced in 23 counties, clay in 22 counties, and shale in 14 counties. Dimensional stone was produced in 11 counties scattered across the state, gypsum in 4 counties in west central Oklahoma, granite in 4 counties in western Oklahoma, and caliche in Texas and Ellis counties in and near the Panhandle. Chat was produced only in Oklahoma County, salt only in Woods County, and tripoli only in Ottawa County. Metro vs. Non-Metro Production. Aggregate production in Oklahoma is highly concentrated in the non- metropolitan counties of the state. In 2019, 71% of production originated in the state’s 58 non-metro counties. The remaining 29% of production occurred in the state’s 19 metropolitan area counties. The Tulsa area is the most significant metro market to produce aggregate materials. The seven Tulsa MSA counties accounted for 12.1 million tons of production in 2019, 15% of total state aggregate output. Limestone is the primary aggregate produced in the Tulsa metro area, with output of 9.4 million tons in 2019, or 22% of statewide limestone production. Tulsa area producers accounted for 2.12 million tons of sand and gravel, 11% of total state output, a reflection of significant construction in the region. The Tulsa region also produced more than half of all shale output statewide in 2019.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 16 Figure 4. Oklahoma Aggregate Production by Type and County (2019) County Caliche Chat Clay Dimen. Stone Granite Gypsum Lime- stone Salt Sand & Gravel Select Fill Shale Tripoli Total Adair - - - - - - 152,076 - - 37,015 - - 189,091 Alfalfa - - - - - - - - - - - - 0 Atoka - - - - - - 3,147,523 - 68,486 - - - 3,216,009 Beaver - - - - - - - - 204,043 - - - 204,043 Beckham - - 11,520 - - - - - 63,556 31,785 1,318 - 108,179 Blaine - - - - - 2,363,263 - - 562,275 - 110,563 - 3,036,101 Bryan - - 91,723 - - - 201,746 - 2,309,621 65,980 - - 2,669,070 Caddo - - - - - 1,151,543 11,365 - - 4,944 - - 1,167,852 Canadian - - 191,115 - - - - - 788,488 39,079 27,223 - 1,045,905 Carter - - - - - - 787,229 - 112,948 - - - 900,177 Cherokee - - 19,069 - - - 743,241 - 15 - - - 762,325 Choctaw - - - - - - 2,700,099 - 123,684 - - - 2,823,783 Cimarron - - - - - - - - 262 - - - 262 Cleveland - - 47,707 - - - - - 949,557 164,439 - - 1,161,703 Coal - - - - - - - - - - 5,298 - 5,298 Comanche - - - - - - 4,462,798 - 195,427 3,462 - - 4,661,687 Cotton - - - - - - - - 408,088 - - - 408,088 Craig - - - - - - 286,440 - - - - - 286,440 Creek - - - - - - 695,636 - 75,880 18,900 72,998 - 863,414 Custer - - - - - - - - - 39,789 - - 39,789 Delaware - - 3,194 - - - - - - 5,580 - - 8,774 Dewey - - - - - - - - 1,652,541 - - - 1,652,541 Ellis 5,764 - - 2,292 - - - - - - - - 8,056 Garfield - - - - - - - - 50,714 - - - 50,714 Garvin - - - - - - - - 4,950 1,953 - - 6,903 Grady - - - - - - - - 871 - - - 871 Grant - - - - - - - - - - - - 0 Greer - - 35,232 - 448 - - - - - - - 35,680 Harmon - - - - - - - - - - - - 0 Harper - - - - - - - - 3,834 - - - 3,834 Haskell - - - 181,589 - - 182,250 - 360,982 15,995 - - 740,816 Hughes - - - - - - - - 3,361 - - - 3,361 Jackson - - - - - 663,516 - - 118,513 - - - 782,029 Jefferson - - - - - - - - 34,500 - - - 34,500 Johnston - - - - 8,010,384 - 3,823,460 - 2,048,967 - - - 13,882,811 Kay - - - - 328,246 - 301,777 - 175,868 - - - 805,891 Kingfisher - - 367,613 - - - - - 1,220,004 16,113 59,966 - 1,663,696 Kiowa - - - - 1,290,031 - 1,894,806 - - - - - 3,184,837 Latimer - - - 8,561 - - - - - 82,844 1,872 - 93,277 LeFlore - - 7,157 485,324 - - 54,564 - 280,195 - 19,864 - 847,104 Lincoln - - - - - - - - 28,801 16,529 - - 45,330 Logan - - 66,325 - - - - - 588,915 14,008 - - 669,248 Love - - 351,912 - - - - - 115,379 2,317 - - 469,608 McClain - - 1,250 - - - - - 82,293 39,654 - - 123,197 McCurtain - - - - - - 533,881 - 93,942 - - - 627,823 McIntosh - - - 22,270 - - 93,005 - 41,198 - 7,931 - 164,404 Major - - - - - 1,102,010 - - 42,125 - - - 1,144,135 Marshall - - - - - - 1,920 - 161,242 - - - 163,162 Mayes - - 7,460 - - - 1,759,510 - 26,708 - - - 1,793,678 Murray - - - - - - 8,062,761 - - - - - 8,062,761 Muskogee - - 135,802 - - - - - 413,584 - 9,790 - 559,176 Continued
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 17 Figure 4. (Continued) Oklahoma Aggregate Production by Type and County (2019) County Caliche Chat Clay Dimen. Stone Granite Gypsum Lime- stone Salt Sand & Gravel Select Fill Shale Tripoli Total Noble - - - - - - - - - - - - 0 Nowata - - - 107,033 - - 9,796 - - - - - 116,829 Okfuskee - - - - - - - - 11,916 - - - 11,916 Oklahoma - 142,777 74,035 - - - - - 1,124,218 162,671 - - 1,503,701 Okmulgee - - - - - - - - 14,587 - - - 14,587 Osage - - - - - - 381,624 - - - - - 381,624 Ottawa - - 21,378 - - - 451,153 - - - - 50,269 522,800 Pawnee - - - - - - 281,443 - - - - - 281,443 Payne - - 23,330 - - - 218,791 - 36,863 - - - 278,984 Pittsburg - - - 4,055 - - 934,718 - 3,795 - - - 942,568 Pontotoc - - 58,681 187,506 - - 930,090 - 1,834,146 - 960 - 3,011,383 Pottawatomi - - - 19,506 - - - - 508,139 - - - 527,645 Pushmataha - - 1,050 - - - 37,261 - - - - - 38,311 Roger Mills - - - - - - - - - - - - 0 Rogers - - 17,000 376 - - 4,841,804 - - 119,551 - - 4,978,731 Seminole - - 127,342 - - - 147,379 - 90,500 - - - 365,221 Sequoyah - - 1,528 103,381 - - 784,307 - 12,926 - 30,546 - 932,688 Stephens - - - - - - - - 3,930 1,134 - - 5,064 Texas 482 - - - - - - - 37,666 - - - 38,148 Tillman - - - - - - - - 105,850 - - - 105,850 Tulsa - - - - - - 2,942,707 - 1,033,371 94,112 202,152 - 4,272,342 Wagoner - - - - - - 287,850 - 997,940 42,908 16,349 - 1,345,047 Washington - - - - - - 399,755 - - - - - 399,755 Washita - - - - - - - - - - - - 0 Woods - - - - - - - 166,037 - - - - 166,037 Woodward - - - - - - - - 27,513 - - - 27,513 Total 6,246 142,777 1,661,423 1,121,89 9,629,109 5,280,332 42,544,765 166,037 19,255,177 1,020,762 566,830 50,269 81,445,620 OKC MSA 0 142,777 380,432 0 0 0 0 0 3,563,143 436,380 27,223 0 4,549,955 Tulsa MSA 0 0 17,000 376 0 0 9,431,064 0 2,121,778 275,471 291,499 0 12,137,188 Lawton MSA 0 0 0 0 0 0 4,462,798 0 603,515 3,462 0 0 5,069,775 Small MSAs 0 0 8,685 588,705 0 0 838,871 0 343,835 0 50,410 0 1,830,506 Metro 0 142,777 406,117 589,081 0 0 14,732,733 0 6,632,271 715,313 369,132 0 23,587,424 Non-Metro 6,246 0 1,263,991 1,121,51 9,629,109 5,280,332 28,650,903 166,037 12,916,027 305,449 248,108 50,269 59,637,988 Note: The Oklahoma City MSA includes Canadian, Cleveland, Grady, Lincoln, Logan, McClain, and Oklahoma counties. The Tulsa MSA includes Creek, Okmulgee, Osage, Pawnee, Rogers, Tulsa, and Wagoner counties. The Lawton MSA includes Comanche and Cotton counties. Small metropolitan areas include the Enid, OK MSA and Le Flore and Sequoyah Counties in the Ft. Smith, AR MSA. Source: Oklahoma Department of Mines and RegionTrack calculations The Lawton MSA (Comanche and Cotton counties) is the second largest producing metro area market. Comanche County is the third largest limestone producing county in the state, with 4.5 million tons of production in 2019. Limestone represents nearly 90% of the Lawton region’s output. The Oklahoma City region accounted for only 5.6% of total statewide aggregate production in 2019. More than three-fourths of the metro area’s production was sand and gravel which reflects general construction activity in the region. Neither limestone nor granite was produced in the Oklahoma City metro area in 2019.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 18 The remaining small metropolitan area counties (Garfield County in the Enid, OK MSA and Le Flore and Sequoyah counties in the Ft. Smith, AR MSA) produced only 2.2% of total state output in 2019. Concentration of Production by Aggregate. Figure 5 highlights the largest producing county for each of the twelve aggregates produced in Oklahoma in 2019, as well as the share of total state production held by the leading producing county. The share held by the leading county lends insight into the degree of concentration in production for each aggregate. Figure 5. Top Producing County by Aggregate Type and Share (2019) Aggregate Leading Producing County Production in Leading County (tons) Total State Production (tons) Share of Total State Production Caliche Ellis 5,764 6,246 92.3% Chat Oklahoma 142,777 142,777 100.0% Clay Kingfisher 367,613 1,661,423 22.1% Dimensional Stone LeFlore 485,324 1,121,896 43.3% Granite Johnston 8,010,384 9,629,110 83.2% Gypsum Blaine 2,363,263 5,280,332 44.8% Limestone Murray 8,062,761 42,544,765 19.0% Salt Woods 166,037 166,037 100.0% Sand & Gravel Bryan 2,309,621 19,255,178 12.0% Select Fill Oklahoma 162,671 1,020,763 15.9% Shale Tulsa 202,152 566,829 35.7% Tripoli Ottawa 50,269 50,269 100.0% Source: Oklahoma Department of Mines and RegionTrack calculations Some aggregates are confined to only a single site or relatively few producing locations (e.g., caliche, chat, granite, salt, and tripoli) while production sites for other aggregates are dispersed far more widely across multiple counties (e.g., clay, limestone, sand and gravel, and select fill). By aggregate in Figure 5: • Ellis County near the Panhandle is the hub of caliche production in the state, with only one other county (Texas) providing a small amount of output in 2019. • Oklahoma County is the only producing county for chat in 2019. • Kingfisher County is the largest clay producer but has only a 22% share of this widespread aggregate and shares it with 21 other counties. • LeFlore County has a 43% share of dimensional stone production but shares the market with ten other counties. • Johnston County has long served as the largest granite-producing hub in the state, with 83% of total state production. Granite was produced in only three other counties in 2019. • Blaine County is the leading gypsum-producing county in the state but has only a 45% share of total state production. Three other counties share the remaining production.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 19 • Murray is the largest producing county for limestone, the state’s most produced aggregate. However, limestone production is widespread, with Murray accounting for only 19% of total state production and production occurring in 34 total counties. • Woods County was the sole producing location for salt in 2019. • Sand and gravel production has the greatest concentration in Bryan County, which has only a 12% share of state production. Sand and gravel is the most widely disbursed aggregate across the state with production occurring in 52 counties. • Select fill is produced in many markets across the state, with highly populous Oklahoma County having the largest share at 16% of state output. A total of 23 counties produced select fill in 2019. • Tulsa County has the highest share of shale at 36% of state output but shares the market with 13 other counties. • Ottawa County is the sole source of tripoli production in 2019, a relatively rare mineral found in northeast Oklahoma. Aggregate Production by Number of Producing Sites. County-level summary data obscure the large number of individual mining sites that comprise the aggregate industry in Oklahoma. There were 417 individual aggregate producing sites across the state reported to ODOM in 2019. Thirteen of these sites produced two aggregates, for a total of 430 unique combinations of location and aggregate type. No site produced more than two aggregates. These 430 combinations are detailed in Figure 6, with total production of each aggregate categorized by seven production brackets. This breakdown provides a detailed view of the number of sites used to provide each aggregate and the relative size of the producing sites operating in each segment of the industry. Overall, nearly one-third of all aggregate mining locations in Oklahoma produced sand and gravel (141 sites) in 2019. Dimensional stone (85 sites) production sites accounted for an additional 20% of the state total while limestone production sites (66 sites) comprised another 15%. Jointly, sand and gravel, dimensional stone, and limestone comprised slightly more than two-thirds (292 sites) of all reported mining locations in Oklahoma in 2019. Smaller numbers of sites produced select fill (45 sites), clay (37 sites), and shale (34 sites). Gypsum was produced at only 10 sites across the state, granite at 6 sites, and caliche at 3 sites in 2019. Only a single location each produced chat, salt, and tripoli. Aggregate sites in Oklahoma produced an average of 195,300 tons in 2019. Average annual production is highest at granite-producing sites (1.6 million tons each) followed by limestone (644,600 tons each) and gypsum (528,000 tons each). Salt (166,000 tons each), chat (142,800 tons each), and sand and gravel (136,600 tons each) sites each produced an average of more than 100,000 tons annually. All other site- types fell well below 100,000 tons per year. Although the state has 85 dimensional stone sites, they produced an average of only 13,200 tons of material each in 2019. Three caliche sites each produced an average of only 2,080 tons of material in 2019.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 20 Figure 6. Oklahoma Aggregate Production by Individual Site and Production Production Range (annual tonnage) Caliche Chat Clay Dimen. Stone Granite Gypsum Limestone Salt Sand & Gravel Select Fill Shale Tripoli Total > 1 million tons 0 0 0 0 3 1 13 0 5 0 0 0 22 500,000 to 1,000,000 tons 0 0 0 0 0 4 8 0 6 0 0 0 18 250,000 to 500,000 tons 0 0 2 1 2 3 11 0 13 0 0 0 32 100,000 to 250,000 tons 0 1 3 4 0 1 16 1 20 2 1 0 49 50,000 to 100,000 tons 0 0 3 0 0 0 3 0 19 3 1 1 30 25,000 to 50,000 tons 0 0 4 2 0 1 3 0 16 8 5 0 39 < 25,000 tons 3 0 25 78 1 0 12 0 62 32 27 0 240 All Production Ranges 3 1 37 85 6 10 66 1 141 45 34 1 430 Share of total Production 0.7% 0.2% 8.6% 19.8% 1.4% 2.3% 15.3% 0.2% 32.8% 10.5% 7.9% 0.2% 100.0% Average Production per Location 2,082 142,777 44,903 13,199 1,604,852 528,033 644,618 166,037 136,562 22,684 16,671 50,269 195,313 Source: Oklahoma Department of Mines and RegionTrack calculations
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 21 Aggregate Production by Individual Producers. In 2019, aggregate production was reported by 341 individual business establishments operating statewide. Many small unpermitted mines, quarries, and pits are undoubtedly operated across the state but cannot be tracked and represent only a small share of the total production of the formal aggregate industry. Only 32 of the 341 firms produced one or more aggregate(s) at more than one site. Accounting for multiple aggregates produced at a single location, 373 unique combinations of producer and aggregate were present in Okahoma in 2019. Figure 7 summarizes production for the 373 combinations of firms and aggregates produced statewide in 2019, with production partitioned into brackets by total annual volume for each producer. The findings illustrate an industry that is comprised of a relatively small number of large producing firms and a large number of relatively small firms. Only 20 firms across the state produced more than 1 million tons of aggregate in 2019. More than half (11 firms) of those in the largest bracket of operators produced limestone, while 6 produced sand and gravel, 2 produced granite, and 1 produced gypsum. An additional 15 firms produced between 500,000 tons and 1 million tons of an aggregate. These include 6 limestone producers, 5 sand and gravel producers, and 3 gypsum operations. Again, this mix of operation types closely reflects the overall composition of aggregate production in Oklahoma. Nineteen firms produced between 250,000 and 500,000 tons in 2019, with 10 firms producing sand and gravel, 4 limestone, 3 clay, 1 gypsum, and 1 dimensional stone. These firms are all less than half the size of the top 20 firms producing more than 1 million tons of aggregate. A reported 39 firms produced between 100,000 and 250,000 tons of aggregate in 2019. Nearly all types of aggregate were produced by these smaller producing firms. A similar mix of firm size and production type is present for both the 27 firms producing between 50,000 and 100,000 tons and the 35 firms producing between 25,000 and 50,000 tons in 2019. By number, most aggregate producing firms are quite small. More than half (218 of 373 firms) extracted less than 25,000 tons of aggregate in 2019. And more than half of these operations were concentrated in the production of only two types of aggregate – sand and gravel (133 firms) and dimensional stone (64 firms). Relatively large numbers of small producers are also found in the production of select fill (48 firms), clay (34 firms), and shale (33 firms). Overall, the state’s largest aggregate producers are dominant in granite, gypsum, limestone, and sand and gravel. Mid-size producers account for most of the production of clay, dimensional stone, salt, and chat. Small producers account for most of the production of caliche, select fill, shale, and tripoli.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 22 Figure 7. Oklahoma Aggregate Production by Aggregate Type and Annual Volume (2019) (a) Number of Producing Firms Production Range Caliche Chat Clay Dimen. Stone Granite Gypsum Limestone Salt Sand & Gravel Select Fill Shale Tripoli Total > 1 million tons 0 0 0 0 2 1 11 0 6 0 0 0 20 500,000 to 1,000,000 tons 0 0 0 0 1 3 6 0 5 0 0 0 15 250,000 to 500,000 tons 0 0 3 1 0 1 4 0 10 0 0 0 19 100,000 to 250,000 tons 0 1 2 4 0 0 9 1 19 2 1 0 39 50,000 to 100,000 tons 0 0 2 0 0 0 3 0 17 3 1 1 27 25,000 to 50,000 tons 0 0 3 3 0 0 2 0 15 8 4 0 35 < 25,000 tons 3 0 24 56 1 0 11 0 61 35 27 0 218 Total Firms by Aggregate 3 1 34 64 4 5 46 1 133 48 33 1 373 Share of Total Firms 0.8% 0.3% 9.1% 17.2% 1.1% 1.3% 12.3% 0.3% 35.7% 12.9% 8.8% 0.3% 100.0% (b) Production by Tonnage Production Range Caliche Chat Clay Dime. Stone Granite Gypsum Limestone Salt Sand & Gravel Select Fill Shale Tripoli Total > 1 million tons 0 0 0 0 9,026,655 2,553,967 34,782,531 0 7,888,594 0 0 0 56,449,066 500,000 to 1,000,000 tons 0 0 0 0 602,006 2,461,275 4,273,934 0 2,801,541 0 0 0 9,447,676 250,000 to 500,000 tons 0 0 1,033,887 282,230 0 265,090 1,568,461 0 3,480,089 0 0 0 5,850,395 100,000 to 250,000 tons 0 142,777 244,527 518,674 0 0 1,517,349 166,037 2,740,789 234,828 166,469 0 5,278,406 50,000 to 100,000 tons 0 0 143,049 0 0 0 255,036 0 1,269,081 228,766 55,949 50,269 1,813,536 25,000 to 50,000 tons 0 0 103,232 110,760 0 0 84,518 0 553,029 276,688 182,028 0 1,311,583 < 25,000 tons 6,246 0 136,728 210,229 448 0 62,936 0 522,054 280,480 162,384 0 1,294,958 Production by Aggregate 6,246 142,777 1,661,423 1,121,893 9,629,109 5,280,332 42,544,765 166,037 19,255,177 1,020,762 566,830 50,269 81,445,620 Share of Total Production 0.0% 0.2% 2.0% 1.4% 11.8% 6.5% 52.2% 0.2% 23.6% 1.3% 0.7% 0.1% 100.0% (c) Share of Production by Type Production Range Caliche Chat Clay Dime. Stone Granite Gypsum Limestone Salt Sand & Gravel Select Fill Shale Tripoli Total > 1 million tons 0.0% 0.0% 0.0% 0.0% 93.7% 48.4% 81.8% 0.0% 41.0% 0.0% 0.0% 0.0% 69.3% 500,000 to 1,000,000 tons 0.0% 0.0% 0.0% 0.0% 6.3% 46.6% 10.0% 0.0% 14.5% 0.0% 0.0% 0.0% 11.6% 250,000 to 500,000 tons 0.0% 0.0% 62.2% 25.2% 0.0% 5.0% 3.7% 0.0% 18.1% 0.0% 0.0% 0.0% 7.2% 100,000 to 250,000 tons 0.0% 100.0% 14.7% 46.2% 0.0% 0.0% 3.6% 100.0% 14.2% 23.0% 29.4% 0.0% 6.5% 50,000 to 100,000 tons 0.0% 0.0% 8.6% 0.0% 0.0% 0.0% 0.6% 0.0% 6.6% 22.4% 9.9% 100.0% 2.2% 25,000 to 50,000 tons 0.0% 0.0% 6.2% 9.9% 0.0% 0.0% 0.2% 0.0% 2.9% 27.1% 32.1% 0.0% 1.6% < 25,000 tons 100.0% 0.0% 8.2% 18.7% 0.0% 0.0% 0.1% 0.0% 2.7% 27.5% 28.6% 0.0% 1.6% Share of Aggregate Production 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: Oklahoma Department of Mines and RegionTrack calculations
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 23 Largest Aggregate Producers. The 50 largest individual producers of aggregate by total tonnage in Oklahoma in 2019 are detailed in Figure 8. Total state aggregate production is highly concentrated among the top 50 producers who jointly accounted for more than 90% of total state output. The companies ranked among the top 50 will vary over time given changes in permit ownership and operating arrangements. It is not uncommon for one company to own the permit for a property but have a separate agreement with another company to mine the property. The state’s two largest producers in 2019 were Dolese Bros. Co. (15.9 million tons, 20.6%) and Martin Marietta (13.8 million tons, 17.0%) with a combined 38% of total state output. The top four produces accounted for almost half (48.4%) of all state aggregate production in 2019. Two additional firms produced more than 5% of total state output in 2019 – Sherwood Companies (4.5 million tons, 5.5%) and Vulcan Materials (4.3 million tons, 5.3%). Other major producers with more than 2% of total state production include CRH (3.1 million tons, 3.8%), LafargeHolcim (2.7 million tons, 3.3%), ACG Arcosa (2.6 million tons, 3.1%), Anchor Stone Co. (2.3 million tons, 2.8%), Kemp Quarries (1.85 million tons, 2.3%), U.S. Silica (1.65 million tons, 2.0%), and SCS Materials (1.6 million tons, 2.0%). The top 10 producers accounted for almost two-thirds (65.7%) of state production. The top 25 producers accounted for more than 80% (81.8%) of state production. Number of Producing Sites Operated by Top Producers. Many aggregate producers across Oklahoma operate multiple mines, quarries, and pits. Figure 8 also provides a count of the number of sites operated and total production for each of the 50 largest aggregate producing firms in Oklahoma in 2019 as reported by ODOM. Dolese Bros. Co. operated the most aggregate producing sites in the state in 2019 with 16 individual locations. Other major multi-site operaters include CRH (12 sites), Martin Marietta (9 sites), and ACG Arcosa (5 sites). Two firms in the top 50 operated 4 sites, while 13 producers operated either two or three sites. The remaining 31 firms in the top 50 operated only a single site.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 24 Figure 8. 50 Largest Aggregate Producers in Oklahoma Rank Aggregate Producer Number of Sites Production (tons) Share of State Total Cumulative Production Cumulative Share 1 Dolese Bros. 16 16,783,759 20.6% 16,783,759 20.6% 2 Martin Marietta 9 13,857,621 17.0% 30,641,380 37.6% 3 Sherwood Companies 2 4,485,730 5.5% 35,127,110 43.1% 4 Vulcan Materials 3 4,320,953 5.3% 39,448,063 48.4% 5 CRH 12 3,085,999 3.8% 42,534,062 52.2% 6 LafargeHolcim 3 2,682,608 3.3% 45,216,670 55.5% 7 ACG Arcosa 5 2,553,967 3.1% 47,770,637 58.7% 8 Anchor Stone Co. 3 2,255,395 2.8% 50,026,032 61.4% 9 Kemp Quarries 4 1,846,448 2.3% 51,872,480 63.7% 10 U. S. Silica 1 1,653,331 2.0% 53,525,811 65.7% 11 SCS Materials, L.P. 1 1,594,503 2.0% 55,120,314 67.7% 12 Lehigh Hanson 1 1,489,585 1.8% 56,609,899 69.5% 13 Alan Ritchey Materials 1 1,165,243 1.4% 57,775,142 70.9% 14 Unimin Corp. Roff Plant 1 1,159,286 1.4% 58,934,428 72.4% 15 Foxrock Ranch, LLC 1 1,033,356 1.3% 59,967,784 73.6% 16 Hoskins Gypsum Co, LLC 1 999,800 1.2% 60,967,584 74.9% 17 Tulsa Cement, LLC 1 860,114 1.1% 61,827,698 75.9% 18 U. S. Gypsum 2 797,959 1.0% 62,625,657 76.9% 19 American Gypsum Co., LLC 1 663,516 0.8% 63,289,173 77.7% 20 Lone Star Industries 1 575,162 0.7% 63,864,335 78.4% 21 Black Mountain Sand Midcon, LLC 1 562,275 0.7% 64,426,610 79.1% 22 FML Sand, LLC 1 560,536 0.7% 64,987,146 79.8% 23 Stigler Stone 2 543,232 0.7% 65,530,378 80.5% 24 Western Aggregates, LLC 1 531,911 0.7% 66,062,289 81.1% 25 Jennings Stone Co. 1 524,771 0.6% 66,587,060 81.8% 26 General Materials (MacArthur Pit) 1 492,046 0.6% 67,079,106 82.4% 27 U. S. Lime Co. 1 481,010 0.6% 67,560,116 83.0% 28 Quality Rock, Inc. 1 385,744 0.5% 67,945,860 83.4% 29 Duit Construction Co., Inc. 1 367,613 0.5% 68,313,473 83.9% 30 J & J Land (Quarry Ranch #3) 1 355,654 0.4% 68,669,127 84.3% 31 Stewart Stone 2 346,053 0.4% 69,015,180 84.7% 32 Lightle Sand & Construction, LLC 1 333,838 0.4% 69,349,018 85.1% 33 Fittstone, Inc. 2 322,201 0.4% 69,671,219 85.5% 34 Van Eaton 1 319,952 0.4% 69,991,171 85.9% 35 Watkins Sand 1 316,911 0.4% 70,308,082 86.3% 36 Meridian Brick, LLC 2 314,362 0.4% 70,622,444 86.7% 37 Muskogee Sand 2 303,900 0.4% 70,926,344 87.1% 38 Williams Family Investments, LLC 1 293,942 0.4% 71,220,286 87.4% 39 Williams Gypsum, LLC 1 265,090 0.3% 71,485,376 87.8% 40 River Valley Materials, LLC 1 261,761 0.3% 71,747,137 88.1% 41 Souter Limestone & Minerals, LLC 1 226,653 0.3% 71,973,790 88.4% 42 Oklahoma Aztec Co., Inc. 2 226,606 0.3% 72,200,396 88.6% 43 General Materials 1 216,294 0.3% 72,416,690 88.9% 44 Mobile Crushing, Inc. 1 201,746 0.2% 72,618,436 89.2% 45 J&R Sand Co. 2 198,251 0.2% 72,816,687 89.4% 46 Mill Creek Dolomite LLC 1 192,825 0.2% 73,009,512 89.6% 47 Sober Brothers 1 175,868 0.2% 73,185,380 89.9% 48 Vickers Sand & Gravel, Inc. 4 175,275 0.2% 73,360,655 90.1% 49 FG Minerals 1 170,538 0.2% 73,531,193 90.3% 50 Excavation Resources, LLC 2 166,469 0.2% 73,697,662 90.5% Source: Oklahoma Department of Mines and RegionTrack calculations
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 25 Aggregate Production by Producing Sites. Some of the individual producing sites across the state are quite large and account for a significant share of total state aggregate production. Figure 9 details the 50 largest individual operating sites in Oklahoma by operator, county, type of aggregate, and amount of production. The top 50 producing sites accounted for 76.5% of total state output in 2019, or 62.3 million tons of production. As a share of total state production of each aggregate, the 50 largest sites accounted for 94% of granite, 87% of limestone, 80% of gypsum, 60% of sand and gravel, and 22% of clay. No other aggregate materials were produced at the 50 largest sites. The largest single producing location in Oklahoma is the Martin Marietta granite mine in Johnston County. The facility produced 5.3 million tons of granite in 2019, 55% of state granite output and 6.5% of total state aggregate output. Twenty-one additional sites produced more than 1 million tons of aggregate in 2019. These include 13 limestone quarries, 5 sand and gravel pits, 2 additional granite mines, and a large gypsum operation. The largest operations are not highly concentrated in any single region of the state, with the top 50 producing locations spread across 31 counties. However, several of the major producing counties are home to multiple large producing sites including Johnston (4), Blaine (3), Kiowa (3), Murray (3), Pontotoc (3), Tulsa (3), Atoka (2), Bryan (2), Choctaw (2), Dewey (2), Kingfisher (2), Mayes (2), and Rogers (2).
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 26 Figure 9. Top 50 Aggregate Producing Locations in Oklahoma – Annual Tonnage (2019) Rank Producer (Location) County Clay Granite Gypsum Limestone Sand & Gravel Total 1 Martin Marietta (Mill Creek) Johnston - 5,309,129 - - - 5,309,129 2 Dolese Bros. (Richards Spur) Comanche - - - 4,462,798 - 4,462,798 3 Dolese Bros. (Davis) Murray - - - 4,186,525 - 4,186,525 4 Vulcan Construction Materials, LLC Johnston - - - 3,630,635 - 3,630,635 5 Sherwood Companies Rogers - - - 2,923,029 - 2,923,029 6 Martin Marietta (Quarry 900) Johnston - 2,701,255 - - - 2,701,255 7 Martin Marietta Murray - - - 2,386,651 - 2,386,651 8 U.S. Silica (#39) Johnston - - - - 1,653,331 1,653,331 9 Anchor Stone Co. (Tulsa Rock Plant #2) Rogers - - - 1,614,839 - 1,614,839 10 Dolese Bros. (Coleman) Atoka - - - 1,611,657 - 1,611,657 11 SCS Materials, L.P. Choctaw - - - 1,594,503 - 1,594,503 12 Sherwood Companies Tulsa - - - 1,562,701 - 1,562,701 13 LafargeHolcim Atoka - - - 1,535,866 - 1,535,866 14 Lehigh Hanson Murray - - - 1,489,585 - 1,489,585 15 Dolese Bros. (Cooperton) Kiowa - - - 1,362,895 - 1,362,895 16 Kemp Quarries Mayes - - - 1,182,474 - 1,182,474 17 Alan Ritchey Materials Bryan - - - - 1,165,243 1,165,243 18 Unimin Corp. Roff Plant Pontotoc - - - - 1,159,286 1,159,286 19 ACG Arcosa Major - - 1,102,010 - - 1,102,010 20 Martin Marietta (Wade Sand) Bryan - - - - 1,100,526 1,100,526 21 Foxrock Ranch, LLC Dewey - - - - 1,033,356 1,033,356 22 Martin Marietta (Snyder) Kiowa - 1,016,271 - - - 1,016,271 23 Hoskins Gypsum Co, LLC Blaine - - 999,800 - - 999,800 24 Dolese Bros. (Hartshorne) Pittsburg - - - 924,655 - 924,655 25 Tulsa Cement, LLC Tulsa - - - 860,114 - 860,114 26 Martin Marietta (Sawyer-Apple) Choctaw - - - 803,090 - 803,090 27 LafargeHolcim Pontotoc - - - 794,830 - 794,830 28 Dolese Bros. (Ardmore) Carter - - - 787,229 - 787,229 29 ACG Arcosa (#5) Caddo - - 763,278 - - 763,278 30 Dolese Bros. (Badger Pit) Creek - - - 695,636 - 695,636 31 U.S. Gypsum Blaine - - 682,890 - - 682,890 32 American Gypsum Co., LLC Jackson - - 663,516 - - 663,516 33 Lone Star Industries Mayes - - - 575,162 - 575,162 34 Dolese Bros. (Guthrie) Logan - - - - 570,760 570,760 35 Dolese Bros. (East Sand Plant) Oklahoma - - - - 569,709 569,709 36 Black Mountain Sand Midcon, LLC Blaine - - - - 562,275 562,275 37 FML Sand, LLC Dewey - - - - 560,536 560,536 38 Western Aggregates, LLC Kiowa - - - 531,911 - 531,911 39 Jennings Stone Co. (Pontotoc Sands Co., LLC) Pontotoc - - - - 524,771 524,771 40 Dolese Bros. (Dover) Kingfisher - - - - 519,248 519,248 41 General Materials (MacArthur Pit) Cleveland - - - - 492,046 492,046 42 U.S. Lime Co. Sequoyah - - - 481,010 - 481,010 43 CRH (Wagoner Plant #17) Wagoner - - - - 425,027 425,027 44 CRH (Roberts Quarry) Cherokee - - - 412,041 - 412,041 45 Vulcan Materials (Waurika Plant) Cotton - - - - 408,088 408,088 46 CRH (East Quarry Main) Tulsa - - - 393,158 - 393,158 47 CRH (Muskogee Sand) Muskogee - - - - 388,669 388,669 48 Quality Rock, Inc. McCurtain - - 385,744 - 385,744 49 Duit Construction Co., Inc. (Young Sand) Kingfisher 367,613 - - - - 367,613 50 Stigler Stone (Tiger) Haskell - - - - 360,982 360,982 Total - Top 50 Producing Locations 367,613 9,026,655 4,211,494 37,188,738 11,493,853 62,288,353 State Total 1,661,423 9,629,109 5,280,332 42,544,765 19,255,177 81,445,620 Top 50 Share of State Total 22.1% 93.7% 79.8% 87.4% 59.7% 76.5% Notes: The top 50 aggregate producing locations in Oklahoma produce no tonnage of caliche, chat, dimensional stone, salt, select fill, shale, or Source: Oklahoma Department of Mines
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 27 III. Economic Contribution of the Oklahoma Aggregate Industry This section of the report evaluates the direct economic contribution of the Oklahoma aggregate industry. A range of federal economic databases are used to prepare an economic profile of the industry in 2020. Historical data on industry trends in the 2001 to 2020 period are evaluated as well. Economic measures include industry revenue, number of business establishments, employment, and employee compensation. The contributions of both employer and nonemployer firms operating in the industry are discussed. Measuring the Industry’s Economic Contribution An economic profile of the aggregate industry is prepared at the state and local levels. Economic data is collected from the Bureau of Labor Statistics Quarterly Census of Employment and Wages (QCEW) survey, the Census Bureau’s County Business Patterns database, Census Bureau’s Economic Census, and the Department of Labor’s Mine Safety and Health Administration databases. Estimates are made for some county-level data in federal databases when undisclosed for confidentiality purposes.14 Geography. The economic role of the aggregate industry is first examined from a statewide perspective to capture the full extent of the industry. County-level data is then used to capture a local perspective more consistent with the dispersed structure of the industry across the state. Activity is also partitioned to reflect activity in the state’s metropolitan and nonmetropolitan areas. NAICS Sectors. The economic measures of aggregate industry activity are prepared using the nine NAICS industry sectors reflecting mining activity and two sectors capturing wholesale trade activity discussed earlier in the report. Again, these sectors are believed to capture the great majority of aggregate industry activity without including excess business activity not directly related to the industry. Employers and Nonemployers. The data further capture the influence of both traditional employers and the large number of nonemployers operating in the industry.15 Employers are traditional business establishments that have wage and salary employees beyond the owners of the firm. In contrast, nonemployers are business entities that have no regular wage and salary employees but produce and distribute income to the owner(s). They are most often sole proprietorships operated by a self-employed individual, but a portion are partnerships and corporations where the owner is not an employee and has no other employees. Nonemployers constitute nearly three-quarters of all businesses in the U.S., but they contribute less than four percent of overall sales and receipts. For nonemployers, each distinct business income tax return filed is counted as an establishment. There are typically a high number of nonemployers in the mining- related sectors in most states. Detailed data at the 6-digit level are not available for nonemployers. Estimates for the aggregate industry must be formed using data at the 4-digit level. Nonemployer estimates are produced using NAICS 2123 (Nonmetallic Mineral Mining and Quarrying) which captures eight of the nine NAICS codes used to define the mining-related portion of the industry. Because detailed data at the 6-digit level for the wholesale
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 28 trade sectors are not available, they are excluded. While this understates the full amount of nonemployer activity in the aggregate sector, the estimate is believed to capture at least 80% of the total. Economic Summary of the Oklahoma Aggregate Industry Figure 10 provides a summary profile of the overall size of Oklahoma’s aggregate industry in 2020. Estimates suggest that the industry was comprised of 293 total business establishments, including 174 employers with wage and salary employees and 119 nonemployer firms. The 293 establishments produced an estimated $719 million in total output, or receipts. Employer firms produced more than 98% of total industry receipts. The average employer establishment generated $4.1 million in annual receipts, far larger than the $98,970 generated by nonemployer firms on average. The aggregate industry employed nearly 2,400 wage and salary workers earning a total of $179 million in compensation in 2020. Average compensation for wage and salary workers reached $74,675 in 2020, about 20% above statewide average compensation of $62,523 across all industries. Figure 10. Oklahoma Aggregate Industry Economic Summary (2020) Industry Output (Receipts) Employers $706.9 million Nonemployers $11.8 million Total Output (Receipts) $718.7 million Business Establishments Employers 174 Nonemployers 119 Total Business Establishments 293 Wage and Salary Employment 2,392 Total Employee Compensation $178.6 million Average Compensation per Wage & Salary Worker $74,675 Output (Receipts) per Wage & Salary Worker $295,520 Output (Receipts) per Nonemployer $98,970 Output (Receipts) per Employer Establishment $4,060,129 Note: The aggregate industry is defined using NAICS sectors 212311, 212312, 212313, 212319, 212321, 212322, 212325, 212399, 213115, 423320 (25%), 423520 (85%). Source: Bureau of Labor Statistics – Quarterly Census of Employment and Wages (QCEW), Census Bureau – County Business Patterns, and U.S. Department of Labor – Mine Safety and Health Administration, and RegionTrack estimates. The 119 nonemployers operating in the industry comprised 43% of all aggregate industry establishments but contributed only about 1.6% of total output by the industry. These firms reflect the large number of very small aggregate producers across the state operating small mines and quarries.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 29 Capturing the Full Industry. It is important to note that the 293 business establishments identified in federal economic databases using the eleven NAICS sectors is less than the 341 firms reported by ODOM as producing aggregate material in Oklahoma in 2019. The difference is largely attributable to both industry and regional misclassification as discussed earlier in the report. These factors are believed to be especially prevalent among the large number of relatively small aggregate producers in the state. There are approximately 150 firms in the state that produced less than 10,000 tons of aggregate in 2019. Many of these very small producers engage in other business lines as their primary activity. They are frequently classified in federal databases as operating in the construction, landscape, architectural, building materials, and other sectors related to aggregate production and use. Because of these known classification issues, our estimates likely understate the full amount of economic activity tied to aggregate production and provide more of a lower bound for the size of the industry in Oklahoma. The estimates in Figure 10 are best viewed as describing those firms that are primarily engaged in the business activities captured by the eleven NAICS sectors used throughout the report. Economic Profile by NAICS Sector. Figure 11 provides a detailed overview of the economic size of the aggregate industy by NAICS sector. Because detailed data at the 6-digit level are not available for nonemployers, the estimates in this section include only traditional employer firms operating in the industry. By number of firms, more than 80% of all aggregate-producing establishments are classified in one of four NAICS sectors: sand and gravel (45 establishments), limestone (33 establishments), other stone (29 establishments), and dimension stone (23 establishments). Only one small firm is reported as operating primarily in the granite mining sector. However, four firms reported granite production to ODOM in 2019, including large granite operations in Johnston County. This suggests important misclassification of the granite mining operations in Johnston County in federal economic databases. Employment and compensation are similary concentrated in the same four NAICS sectors, with 1,811 (76%) of the 2,392 jobs and $130.9 million (73%) of $178.6 million in total compensation paid across all sectors in 2020. Output produced per worker in the industry averaged approximatley $293,000 in 2020 but varies greatly across the nine sectors. The highest output per worker is found in industrial sand mining ($376,163), limestone ($337,623), minerals-wholesale ($333,223), other nonmetallic mining ($332,351), and construction sand and gravel ($296,046). Far lower average output levels are reported in granite ($101,798), clay and ceramic minerals ($122,480), and dimension stone ($180,307). Average compensation by sector closely tracks output per worker. Higher than industry average compensation is found in minerals-wholesale ($107,839), support activities ($88,143), industrial sand mining ($86,474), other nonmetallic mining ($82,265), and limestone ($81,749). Far lower compensation is found in granite ($37,703), clay and ceramic minerals ($42,089), and dimension stone ($52,263). The earlier note on the misclassifiction of granite operations in Johnston county likely underlies the low average compensation reported in the granite sector.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 30 Figure 11. Economic Profile of the Oklahoma Aggregate Industry by Sector Aggregate Industry - NAICS Sector Establish- ments Employ- ment Total Employee Compen- sation Industry Output (Revenue) Average Compen- sation per Worker Average Output per Worker Output per Establish- ment 212311 - Dimension Stone Mining and Quarrying 23 294 $15,365,252 $54,700,297 $52,263 $180,307 2,378,274 212312 - Crushed and Broken Limestone Mining and Quarrying 33 751 61,393,430 253,554,867 81,749 337,623 7,683,481 212313 - Crushed and Broken Granite Mining and Quarrying 1 10 377,029 1,017,979 37,703 101,798 1,017,979 212319 - Other Crushed and Broken Stone Mining and Quarrying 29 253 16,787,627 63,289,354 66,354 250,156 2,182,392 212321 - Construction Sand and Gravel Mining 45 513 37,406,804 151,871,626 72,918 296,046 3,374,925 212322 - Industrial Sand Mining 8 154 13,317,022 57,929,045 86,474 376,163 7,241,131 212325 - Clay and Ceramic and Refractory Minerals Mining 2 5 210,446 629,233 42,089 122,480 314,617 212399 - All Other Nonmetallic Mineral Mining 9 188 15,465,845 62,482,013 82,265 332,351 6,942,446 213115 - Support Activities for Nonmetallic Minerals (except Fuels) Mining 8 123 10,841,630 36,438,718 88,143 273,244 4,554,840 423320 - Brick, Stone, and Related Construction Material Merchant Wholesalers 11 91 6,354,371 21,414,231 70,021 209,362 1,946,748 423520 - Coal and Other Mineral and Ore Merchant Wholesalers 5 10 1,099,958 3,541,864 107,839 333,223 694,483 All Aggregate Industry Sectors 174 2,392 $178,619,415 $706,869,228 $74,675 $292,554 $4,060,133 Note: Only 25% of NAICS 423320 and 85% of NAICS 423530 are included as components of the aggregate industry. Source: Bureau of Labor Statistics – Quarterly Census of Employment and Wages (QCEW), Census Bureau – County Business Patterns, and U.S. Department of Labor – Mine Safety and Health Administration.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 31 Economic Trends in the Oklahoma Aggregate Industry Figure 12 provides an overview of historical trends in business establishments, employment, compensation, and revenue for the aggregate industry in the 2001 to 2020 period. These measures reflect only employer firms operating within the industry. Major Industry Trends. The industry posted significant growth in each of the past two decades, but with significant volatility in both periods. From 2001 to 2010, the industry experienced net growth over the full period but was hampered by the national recession during the 2008-10 Great Recession period. Strong growth through 2007 was followed by sharp contraction from 2008 to 2010. Across the 2010 to 2020 period, the industry again posted solid net growth on most measures despite some volatility. Industry weakness surfaced in 2015 as the state underwent an oil and gas-driven state-level recession and again in 2020 during the recent national recession and Covid 19 pandemic. Figure 12. Oklahoma Aggregate Industry – Economic Profile (a) Number of Business Establishments (b) Wage and Salary Employment (c) Total Employee Compensation (d) Total Revenue Source: Bureau of Labor Statistics – Quarterly Census of Employment and Wages (QCEW), Census Bureau – County Business Patterns, and U.S. Department of Labor – Mine Safety and Health Administration. 0 50 100 150 200 250 300 350 01 03 05 07 09 11 13 15 17 19 Nonemployer Employer 1,919 1,831 2,392 0 500 1,000 1,500 2,000 2,500 3,000 01 03 05 07 09 11 13 15 17 19 82.0 88.4 178.6 0 20 40 60 80 100 120 140 160 180 200 01 03 05 07 09 11 13 15 17 19 $Millions 364.7 380.6 718.6 0 100 200 300 400 500 600 700 800 01 03 05 07 09 11 13 15 17 19 $Millions
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 32 Business Establishments and Revenue. Business formation was steady across the most recent decade from 2010 and 2020 (Figure 12a). The aggregate industry added 34 employer establishments (24% increase) and 22 nonemployer establishments (23% increase). Employer businesses were added in nine of the eleven NAICS sectors comprising the industry. The weakest performance measured by establishment growth was a small reduction in the number of both granite mining and construction materials-wholesale companies. Total revenue from aggregate production reached an estimated $718.6 million in 2020, 84% above 2010 revenue (Figure 12d). Annual revenue growth averaged 6.3% over the decade and was especially strong from 2012 to 2019, posting an 8% average gain. Industry revenue was down slightly in 2020, reflecting both the state economic slowdown from Covid 19 and ongoing retrenchment in the oil and gas industry. Employment and Compensation. Employment in the aggregate industry has closely tracked the rising number of business establishments the past decade (Figure 12b). The industry added 490 new workers the past decade, a 26% increase. Total employee compensation increased at a far faster pace than employment the past decade (Figure 12c), almost doubling (98% increase) in the period. The sharp acceleration in compensation growth the past decade pushed average compensation per worker up by 57% (from $47,487 to $74,675) between 2010 and 2020. This gain was roughly double the 29% gain (from $48,515 to $62,523) in overall state wages in the period. Aggregate Industry vs. State Average Compensation. Compensation per worker in the aggregate industry has historically exceeded the state average (Figure 13). However, the sharp slowdown in the aggregate industry in the 2008 to 2010 recessionary period weighed heavily on aggregate industry compensation and opened up a slight wage gap relative to the state. Compensation in the aggregate sector has since returned to well above statewide average compensation since 2012, with the gap widening to almost 20% in 2020 ($74,675 vs. $62,523). Figure 13. Average Compensation per Worker – Aggregate Industry vs. State Source: Bureau of Labor Statistics – Quarterly Census of Employment and Wages (QCEW) and Census Bureau – County Business Patterns. 42,754 45,686 74,675 34,779 46,699 62,523 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 Aggregate Industry Statewide Average
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 33 Other Industry Metrics. Figure 14 provides a range of additional metrics evaluating the economic size and performance of the Oklahoma aggregate industry. Establishments in the aggregate industry remain relatively small with an average of about 14 employees, little changed since 2004 (Figure 14b). Total compensation per establishment increased 59% between 2010 and 2020, with compensation paid by the average employer now totaling just more than $1 million. Firm size measured by revenue per establishment has risen 50% since 2010, reaching approximately $4.1 million in 2020 (Figure 14d). The rise in average revenue per establishment reflects a similar 48% increase in revenue per employee since 2010, reaching $295,520 in 2020 (Figure 14c). This suggests strong productivity gains per worker in the industry the past decade. Figure 14. Oklahoma Aggregate Industry Performance – Other Metrics (a) Total Compensation per Establishment (b) Employees per Establishment (Employers) (c) Average Revenue per Employee (d) Average Revenue per Establishment (Employers) Source: Bureau of Labor Statistics – Quarterly Census of Employment and Wages (QCEW), Census Bureau – County Business Patterns, and U.S. Department of Labor – Mine Safety and Health Administration. 0.78 0.61 1.03 0.0 0.2 0.4 0.6 0.8 1.0 1.2 01 03 05 07 09 11 13 15 17 19 $Millions 18.1 12.7 13.7 0 2 4 6 8 10 12 14 16 18 20 01 03 05 07 09 11 13 15 17 19 186,514 192,454 295,520 0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 01 03 05 07 09 11 13 15 17 19 3.4 2.6 4.1 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 01 03 05 07 09 11 13 15 17 19 $Millions
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 34 Nonemployer Trends. The 119 nonemployers operating in the Oklahoma aggregate industry in 2020 have experienced more volatility than employers the past two decades. Figure 15 captures long-run trends for the number of nonemployers, total annual receipts, and receipts per nonemployer. The current number of nonemployers operating in the aggregate sector is down from a recent high of 134 reported in 2017 (Figure 15a). However, the nonemployer count is still above the average of 102 the past two decades. Nonemployers suffered a more extended decline than employer establishments beginning in 2008 during the Great Recession period, with declining counts through 2013. Figure 15. Oklahoma Aggregate Industry Non-Employers Trends (a) Number of Non-Employer Establishments (b) Non-Employer Total Annual Receipts (c) Non-Employer Annual Receipts per Establishment Source: Census Bureau – Nonemployer Statistics 88 119 85 134 119 0 20 40 60 80 100 120 140 160 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 6.76 16.35 7.82 11.78 0 2 4 6 8 10 12 14 16 18 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 $Millions 76,761 137,353 87,809 126,936 98,970 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 35 Total receipts of nonemployers experienced a similar prolonged decline that began in 2008 and extended into 2012 (Figure 15b). Nonemployer receipts have since rebounded to near $12 million annually, well above the recent 2012 low of $7.8 million but well below the peak level of $16.3 million reached in 2008. Despite the volatility in the number of nonemployer establishments and receipts the past two decades, average annual receipts across all nonemployers continues to fluctuate around $100,000 annually (Figure 15c). County-Level Aggregate Industry Activity Aggregate production is reported in 71 of Oklahoma’s 77 counties and is a significant contributor to economic activity at the local level in many counties. Figure 16 highlights county-level aggregate production along with key economic measures including establishments, wage and salary employment, total compensation, and average compensation per worker.16 Aggregate industry compensation as a share of total county compensation is provided as a measure of the local share of total economic activity tied to the industry within each county. Aggregate production amounts reflect 2019 tonnage while the remaining economic measures reflect 2020 conditions. The estimates capture only the activity of employer firms. Establishments. Only five counties are home to seven or more aggregate producing firms. These include Oklahoma (15 establishments), Tulsa (12 establishments), LeFlore (10 establishments), Johnston (8 establishments), and Haskell (7 establishments) counties. All remaining counties have five or fewer aggregate producing establishments. An additional 18 counties have between three and five aggregate producing establishments, including Canadian (5), Sequoyah (4), Choctaw (4) Kingfisher (4), Kiowa (4), Payne (4), Atoka (3), Blaine (3), Bryan(3), Creek (3), Kay (3), Love (3), McClain (3), McIntosh (3), Murray (3), Pittsburg (3), and Pontotoc (3). Four additional establishments operate statewide and have no single county classification. Nine counties report no aggregate producing firms – Alfalfa, Cimarron, Coal, Delaware, Ellis, Grant, Harmon, Noble, and Roger Mills. Four of the nine counties – Cimarron, Coal, Delaware, and Ellis – report a small amount of aggregate production but no producing firms located within the county.17 Employment and Compensation. Only nine counties report no employment and compensation paid within the aggregate industry. County-level employment and compensation in the aggregate industry generally reflect the level of aggregate production volume in each county. A core group consisting of seven counties report more than 100 workers in the aggregate industry. Johnston County has the largest employment base with 233 workers, followed by LeFlore (230 jobs), Oklahoma (191 jobs), Murray (167 jobs), Haskell (137 jobs), Pontotoc (110 jobs), and Kiowa (106 jobs) counties. These counties are located primarily in central, south-central, and southeast Oklahoma. These same seven counties produced the largest amount of total employee compensation among the counties, ranging from $18.9 million in Johnston county to $8.7 million in Kiowa county in 2020. Jointly the seven largest producing counties employ 1,174 workers, or approximately half the state total of aggregate industry employment.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 36 Figure 16. Oklahoma Aggregate Industry – County Profile County Aggregate Industry All County Industries Production (Tons) Establish- ments Employ- ment Total Annual Compensation Average Compensation Total County Compensation Aggregate Share of Total County Compensation Adair 189,091 1 2 $141,999 $70,999 197,479,707 0.1% Alfalfa 0 0 0 0 0 76,882,353 0.0% Atoka 3,216,009 3 34 2,410,119 70,886 138,777,680 1.7% Beaver 204,043 1 7 368,030 52,576 70,264,117 0.5% Beckham 108,179 1 2 124,252 62,126 502,186,075 0.0% Blaine 3,036,101 3 27 1,921,770 71,177 157,072,037 1.2% Bryan 2,669,070 3 22 1,745,824 79,356 1,076,411,190 0.2% Caddo 1,167,852 2 17 1,127,697 66,335 403,216,485 0.3% Canadian 1,045,905 5 73 5,574,674 76,365 1,829,777,143 0.3% Carter 900,177 2 14 919,389 65,671 1,278,461,114 0.1% Cherokee 762,325 2 29 1,933,187 66,662 830,258,611 0.2% Choctaw 2,823,783 4 39 2,713,862 69,586 181,209,809 1.5% Cimarron 262 0 0 0 0 34,919,953 0.0% Cleveland 1,161,703 1 19 1,189,388 62,599 4,686,820,855 0.0% Coal 5,298 0 0 0 0 52,348,519 0.0% Comanche 4,661,687 1 57 4,374,694 76,749 2,207,653,954 0.2% Cotton 408,088 1 4 198,477 49,619 67,630,969 0.3% Craig 286,440 1 9 475,076 52,786 244,896,535 0.2% Creek 863,414 3 14 961,868 68,705 1,084,251,292 0.1% Custer 39,789 1 3 171,429 57,143 701,977,212 0.0% Delaware 8,774 0 0 0 0 399,675,954 0.0% Dewey 1,652,541 2 19 1,206,836 63,518 103,083,363 1.2% Ellis 8,056 0 0 0 0 58,855,343 0.0% Garfield 50,714 1 5 317,589 63,518 1,300,609,597 0.0% Garvin 6,903 1 3 192,214 64,071 594,863,107 0.0% Grady 871 1 1 57,143 57,143 637,536,451 0.0% Grant 0 0 0 0 0 88,321,470 0.0% Greer 35,680 1 1 34,018 34,018 39,581,602 0.1% Harmon 0 0 0 0 0 30,823,928 0.0% Harper 3,834 1 2 147,112 73,556 53,287,420 0.3% Haskell 740,816 7 137 10,292,547 75,128 135,634,669 7.6% Hughes 3,361 1 1 45,162 45,162 125,155,317 0.0% Jackson 782,029 1 21 1,493,826 71,135 523,684,695 0.3% Jefferson 34,500 1 2 147,112 73,556 49,394,240 0.3% Johnston 13,882,811 8 233 18,866,711 80,973 134,562,670 14.0% Kay 805,891 3 28 1,856,669 66,310 985,933,000 0.2% Kingfisher 1,663,696 4 34 2,327,119 68,445 409,836,127 0.6% Kiowa 3,184,837 4 106 8,661,985 81,717 89,107,801 9.7% Latimer 93,277 1 5 367,781 73,556 118,244,370 0.3% LeFlore 847,104 10 230 16,143,546 70,189 603,289,460 2.7% Lincoln 45,330 1 3 171,429 57,143 364,031,825 0.0% Logan 669,248 2 8 588,449 73,556 367,852,185 0.2% Love 469,608 3 28 2,107,261 75,259 310,134,217 0.7% McClain 123,197 3 12 1,060,356 88,363 499,603,137 0.2% McCurtain 627,823 2 45 3,032,488 67,389 555,989,174 0.5% McIntosh 164,404 3 51 3,584,412 70,283 164,641,906 2.2% Major 1,144,135 1 42 2,928,138 69,718 110,624,076 2.6% Marshall 163,162 2 6 342,859 57,143 221,752,387 0.2% Mayes 1,793,678 1 13 832,926 64,071 770,982,610 0.1% Murray 8,062,761 3 167 13,529,395 81,014 258,276,978 5.2% Muskogee 559,176 2 21 1,345,496 64,071 1,664,605,742 0.1% Continued
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 37 Figure 16. (Continued) Oklahoma Aggregate Industry – County Profile County Aggregate Industry All County Industries Production (Tons) Establish- ments Employ- ment Total Annual Compensation Average Compensation Total County Compensation Aggregate Share of Total County Compensation Noble 0 0 0 0 0 275,252,157 0.0% Nowata 116,829 1 8 512,570 64,071 95,806,887 0.5% Okfuskee 11,916 1 1 35,143 35,143 100,776,333 0.0% Oklahoma 1,503,701 15 191 14,916,006 78,094 32,469,889,623 0.0% Okmulgee 14,587 1 1 52,659 52,659 503,039,529 0.0% Osage 381,624 1 21 1,345,496 64,071 326,046,962 0.4% Ottawa 522,800 2 27 2,035,652 75,395 554,087,029 0.4% Pawnee 281,443 2 19 1,217,353 64,071 169,166,623 0.7% Payne 278,984 4 42 3,165,086 75,359 1,809,439,771 0.2% Pittsburg 942,568 3 30 1,922,137 64,071 873,198,138 0.2% Pontotoc 3,011,383 3 110 8,955,889 81,417 1,136,850,671 0.8% Pottawatomie 527,645 1 9 576,641 64,071 1,088,648,178 0.1% Pushmataha 38,311 1 1 57,143 57,143 115,357,449 0.0% Roger Mills 0 0 0 0 0 45,249,018 0.0% Rogers 4,978,731 1 87 6,954,570 79,938 1,598,394,333 0.4% Seminole 365,221 2 18 1,462,225 81,235 352,005,857 0.4% Sequoyah 932,688 4 68 5,262,919 77,396 378,285,236 1.4% Stephens 5,064 1 1 51,091 51,091 802,399,389 0.0% Texas 38,148 1 3 168,460 56,153 528,126,508 0.0% Tillman 105,850 1 4 256,285 64,071 77,491,358 0.3% Tulsa 4,272,342 12 91 7,282,417 80,027 24,285,686,708 0.0% Wagoner 1,345,047 2 33 2,492,775 75,539 538,851,760 0.5% Washington 399,755 1 7 448,499 64,071 1,296,924,401 0.0% Washita 0 1 4 228,572 57,143 95,658,529 0.2% Woods 166,037 2 7 419,536 59,934 180,880,875 0.2% Woodward 27,513 2 4 228,572 57,143 495,134,317 0.0% Unclassified - 4 9 539,404 59,934 201,442,852 0.3% All Counties 81,445,620 174 2,392 $178,619,415 $74,675 $97,986,560,919 0.2% OKC MSA 4,549,955 28 307 23,557,445 76,734 40,855,511,219 0.1% Tulsa MSA 12,137,188 22 266 20,307,138 76,343 28,505,437,207 0.1% Lawton MSA 5,069,775 2 61 4,573,171 74,970 2,275,284,923 0.2% Small MSAs 1,830,506 15 303 21,724,053 71,697 2,282,184,293 1.0% Total MSA 23,587,424 67 937 $70,161,808 $74,879 $73,918,417,642 0.1% Nonmetro 57,858,196 107 1,455 $108,457,607 $74,541 $24,068,143,277 0.5% Notes: Production data is for 2019. All economic measures are for 2020. Source: Oklahoma Department of Mines, Census Bureau - County Business Patterns, U.S. Department of Labor, Mine Safety and Health Administration, and Bureau of Labor Statistics - Quarterly Census of Employment and Wages (QCEW)
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 38 Aggregate production is a major contributor to the local economy in all of these counties except far larger Oklahoma county. As a share of total county employee compensation, the aggregate industry accounts for 14.0% of compensation in Johnston, 9.7% in Kiowa, 7.6% in Haskell, 5.2% in Murray, and 2.7% in Le Flore. Aggregate industry activity produces just less than 1% of total county wages in Pontotoc County and only a negligible share of Oklahoma County compensation. Seven additional counties have more than 1% of total county employee compensation derived from aggregate industry hiring, including Major (2.6%), McIntosh (2.2%), Atoka (1.7%), Choctaw (1.5%), Sequoyah (1.4%%), Blaine (1.2%), and Dewey (1.2%). In total, 12 Oklahoma counties generate more than 1% of total local employee compensation from aggregate industry hiring. An additional 6 counties report having 50 to 100 aggregate industry employees, 12 counties report 25 to 50 aggregate industry employees, and 43 counties report less than 25 aggregate industry employees. Similarly, an additional 24 counties report more than $1 million in employee compensation from aggregate producing firms. Thirty-seven more counties report employee compensation of less than $1 million. The six Oklahoma counties with no aggregate production in 2019 include Alfalfa, Grant, Harmon, Noble, Roger Mills, and Washita. Among these six, Washita county reports no aggregate production but has one firm with four employees located in the county. Average Compensation per Worker. Average compensation reached $74,675 for workers in Oklahoma’s aggregate industry in 2019, but varies considerably across the producing counties. The highest average compensation is found in McClain County ($88,363) and lowest in Greer County ($34,018). Unlike overall wages across the state, wages in the state’s metropolitan areas are only marginally higher than in the nonmetropolitan areas. The largest producing counties tend to have the highest average compensation, with only 18 counties having above industry average wages. As a result, the median annual wage of approximately $66,500 is well below the average for the 68 counties with aggregate industry employment. Thirty-two additional producing counties have wages below the overall industry average of $74,674 but above the state average wage of $62,523. Nearly all other counties report average compensation per worker in the aggregate sector above $50,000. Only four counties (Cotton, Hughes, Okfuskee, and Greer) report average annual compensation in the aggregate industry below $50,000. Among the four, all have only one establishment located in the county and three of the four have only a single employee. These very small businesses are unlikely to represent the owner-operator’s sole source of income.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 39 Comparable Industries Placing the size of the aggregate industry alongside other sectors of the state economy of similar size provides useful context for evaluating the absolute size of the sector. A common approach in making this type of comparison is to use gross domestic product (GDP), or value added, produced in the industry as a benchmark. The use of value added eliminates any differences in the underlying meaning of receipts or output across industry sectors, especially when comparing industries to retail or manufacturing operations. GDP is lower than output, or receipts, and does not include spending by aggregate producers on intermediate goods used in production. Oklahoma aggregate industry receipts are first converted to GDP using the ratio of value added to receipts for the industry from the 2017 Economic Census administered by the Census Bureau. The Economic Census provides detailed data on the structure of industry receipts and value added at five-year intervals, with the most recent estimate produced in 2017. The ratio of value added to receipts is 93.7% across the eleven aggregate industry sectors in 2017. The ratio is generally highly stable in most states over intermediate time periods. GDP, or value added, for the aggregate industry in 2019 is subsequently estimated at $663.1 million (i.e., $707.65 million x .937). Figure 17 compares GDP produced in the aggregate industry relative to multiple industry sectors as reported by the Bureau of Economic Analysis for 2019, the most recent year of detailed state GDP data available. To enhance comparability, the sectors used for comparison in Figure 17 are primarily 4-digit NAICS sectors. This is consistent with the aggregation level of NAICS 2123 which comprises the bulk of the aggregate sector. The size of the aggregate sector by GDP falls within a range of several well-known goods-producing and service-providing industries that play an important role in the state economy. Relative to other larger well known industries, the aggregate industry is roughly three-fourths the size of the state’s chemical manufacturing industry ($895 million) and two-thirds the size of the size of the state’s paper manufacturing industry, both nearly $1 billion sectors that are established components of the state economy. Aggregate industry GDP is only slightly smaller than the critical Warehousing and storage sector ($765.8 million) and the Securities, commodities, and financial investment services sector ($751.7 million). Relative to smaller industries, GDP produced in the aggregate sector exceeds that produced in Motor vehicles, bodies and trailers, and parts manufacturing ($650.7 million), Performing arts, spectator sports, museums, and related activities ($645.1 million), and Computer and electronic product manufacturing ($623.7 million). GDP in the aggregate sector far exceeds that produced in Waste management and remediation services ($439.0 million), Electrical equipment, appliance, and component manufacturing ($410.8 million), Primary metal manufacturing ($329.3 million), and Wood product manufacturing ($240.4 million) Relative to other smaller but key service-providing sectors, the aggregate industry is more than double the size of the Forestry, fishing, and related activities sector ($265.2 million), triple the size of the Funds,
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 40 trusts, and other financial vehicles sector ($233.8 million), more than four times the size of the Printing sector ($158.5 million), and more than six times the size of the state’s Motion picture and sound recording sector ($108.5 million). Figure 17. Gross Domestic Product in Comparable Oklahoma Industries Industry (BEA Designation) 2019 GDP ($mil.) Share of State GDP Paper manufacturing $955.7 0.5% Chemical manufacturing 894.7 0.4% Securities, commodity contracts, & other finan. invest. activities 765.8 0.4% Warehousing and storage 751.7 0.4% Aggregate (noncoal nonmetallic mining) 663.1 0.3% Motor vehicles, bodies and trailers, and parts manufacturing 650.7 0.3% Performing arts, spectator sports, museums, and related activities 645.1 0.3% Computer and electronic product manufacturing 623.7 0.3% Waste management and remediation services 439.0 0.2% Electrical equipment, appliance, and component manufacturing 410.8 0.2% Primary metal manufacturing 329.3 0.2% Forestry, fishing, and related activities 265.2 0.1% Wood product manufacturing 240.4 0.1% Funds, trusts, and other financial vehicles 233.8 0.1% Printing and related support activities 158.5 0.1% Furniture and related product manufacturing 132.6 0.1% Motion picture and sound recording industries 108.5 0.1% All industry total $202,036.1 100.0% Source: Census Bureau – 2017 Economic Census and Bureau of Economic Analysis
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 41 IV. Gross Economic Contribution – Oklahoma Aggregate Industry The activity taking place within the state’s aggregate industry produces a substantial direct economic contribution to the state economy. In 2020, the industry’s employer firms produced $707 million in output and employed nearly 2,400 wage and salary workers earning $179 million in compensation. Like all industry sectors, the state’s aggregate industry has a strong degree of economic interdependence with many other sectors of the state economy. These linkages create spillover economic activity in other industry sectors as the aggregate industry expands over time. In this section, we use the direct activity in the aggregate industry to estimate the resulting economic spillover activity and the gross economic contribution of the industry to the overall state economy. Modeling Regional Economic Linkages Direct production within the state’s aggregate industry creates measurable spillover activity that can be tracked in the form of output, employment, and employee compensation created in other sectors of the economy. Estimates of the economic spillover effects from the industry are formed using RIMS II input- output multipliers for the state of Oklahoma produced by the U.S. Bureau of Economic Analysis (BEA).18 The multipliers provide model-based estimates of the impact that a local final demand shock has on total output, employee compensation, and employment in a region. The multipliers can also be used to form estimates of an industry’s total, or gross, economic contribution to the state economy.19 The approach uses the direct activity of firms operating within the aggregate industry along with a model of the flow of expenditures between businesses, households, and the government sector within the state.20 The indirect, or spillover, activity occurs as aggregate producers purchase goods and services from firms in other sectors of the economy. In other words, the multipliers provide a convenient method for estimating the spillover effects that a change in output, employment, or employee compensation within the aggregate industry may have on broader state economic activity. To accommodate the various activities taking place within the aggregate industry, data for each component of the industry are matched by NAICS sector to the RIMS II industry structure.21 The individual effects of each sector of the industry are estimated and then aggregated to determine the overall industry effect.22 Gross Economic Contribution of the Aggregate Industry23 Gross economic spillover impacts resulting from the operation of the state’s aggregate industry in 2020 are detailed in Figure 18. Included are estimates of the amount of statewide output, employment, and employee compensation supported by employer firms in the aggregate industry, both directly and through spillover effects. Gross Economic Impact. The estimates suggest that the direct operations of the aggregate industry along with its spillover effects make a sizeable gross contribution to the broader state economy. In total, the
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 42 state’s aggregate industry supported an estimated $1.3 billion in state output, 8,450 jobs, and $457 million in employee compensation in 2020. Output. The estimated $1.3 billion in total state output is the broadest measure of the total economic contribution of the aggregate industry and can be partitioned into direct, indirect, and induced effects.24 The indirect effect is the economic output generated in the state resulting from spending by firms in the aggregate industry on goods and services to fund production or capital expenditures. The induced effect reflects the economic output generated in other sectors of the state economy resulting from new household spending in the state out of household earnings received as part of the direct and indirect effects. The direct effect includes $707 million in output generated directly by aggregate producing establishments in the state. The direct output of the industry in turn supported an estimated $593 million in indirect and induced output in other industries statewide. In other words, each dollar of new direct output within the aggregate industry supported an additional $0.84 in estimated economic output statewide. Employee Compensation. The total impact of $457 million in gross employee compensation supported by the aggregate industry’s activities and expenditures can also be partitioned into direct, indirect, and induced effects. The direct effect is the $179 million in compensation paid directly to employees in the aggregate industry. The direct earnings supported an incremental $278 million in added indirect and induced earnings for workers in other industries statewide. Each dollar of direct earnings by aggregate industry employees supported an additional $1.56 of household earnings statewide. Figure 18. Gross Economic Contribution - Oklahoma Aggregate Industry (2020) Direct Effects Indirect and Induced Effects Total Effects NAICS Industry Description Output ($mil.) Employee Compen- sation ($mil) Employ- ment Output ($mil) Employee Compen- sation ($mil) Employ- ment Output ($mil) Employee Compen- sation ($mil) Employ- ment 212311 Dimension Stone 54.7 15.4 294 46.1 25.5 785 100.8 40.8 1,079 212312 Crushed and Broken Limestone 253.6 61.4 751 213.8 101.8 2,005 467.4 163.2 2,756 212313 Crushed and Broken Granite 1.0 0.4 10 0.9 0.6 27 1.9 1.0 37 212319 Other Crushed and Broken Stone 63.3 16.8 253 53.4 27.8 675 116.7 44.6 928 212321 Construction Sand and Gravel 151.9 37.4 513 128.1 62.0 1,370 280.0 99.4 1,883 212322 Industrial Sand 57.9 13.3 154 48.9 22.1 411 106.8 35.4 565 212325 Clay and Ceramic Minerals 0.6 0.2 5 0.5 0.3 13 1.2 0.6 18 212399 All Other Nonmetallic Minerals 62.5 15.5 188 52.5 20.5 410 115.0 36.0 598 213115 Support Activities 36.4 10.8 123 30.7 10.3 208 67.1 21.1 331 423320 Construction Material-Wholesale 21.4 6.4 91 15.2 6.2 141 36.6 12.5 231 423520 Minerals-Wholesale 3.5 1.1 10 2.5 1.1 16 6.1 2.2 26 Total Aggregate Industry $706.9 $178.6 2,392 $592.6 $278.3 6,060 $1,299.5 $456.9 8,452 Source: Bureau of Economic Analysis: RIMS II and RegionTrack calculations
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 43 The indirect effect is the earnings paid in the state resulting from expenditures on goods and services by the aggregate industry. The induced effect reflects the earnings paid in other sectors of the state economy resulting from new household spending in the region out of earnings received as part of the direct and indirect effects. Employment. Measured by direct employment, 2,392 employees worked as wage and salary workers in the Oklahoma aggregate industry in 2020. This direct employment supported an additional 6,060 jobs statewide through estimated indirect and induced effects. The indirect effect is the employment generated across the state because of spending by the aggregate industry on goods and services. The induced effect reflects the employment generated in other sectors of the economy resulting from new household spending in the state out of household earnings received as part of the direct and indirect effects. In total, the operations of the aggregate industry directly and indirectly supported an estimated 8,452 jobs statewide in 2020. Each job in the aggregate sector supported 2.5 additional jobs in the state economy. The high employment multiplier is typical of most mining sectors and other production sectors with high output per worker.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 44 V. Tax Contributions of the Aggregate Industry Oklahoma’s aggregate industry and its employees make significant tax payments to state and local governments. Common taxes paid to the state include sales and use tax, motor vehicle tax, corporate income tax, and others. Employees of aggregate producers pay personal income tax on employee compensation. Firms in the aggregate industry also pay significant ad valorem tax and sales and use tax to city and county governments across Oklahoma. In addition, the spillover economic activity discussed in the prior section of the report generates added tax revenue. These tax contributions are estimated and reviewed throughout this section of the report. State Tax Contribution The contribution of the aggregate industry to total state taxes can be estimated as a share of the direct economic contribution of the industry. The estimates are derived using an average tax rate derived from state taxes as a share of state employee compensation.25 Specifically, the average tax rate is calculated as the ratio of total state taxes as defined by the Census Bureau26 (minus corporate taxes and taxes not elsewhere classified (which include oil and gas severance taxes)) to total state employee compensation and equals 10.7% over the 2017 to 2019 period.27 State tax shares are generally stable over intermediate time periods. Figure 19. Estimated State Tax Effects from Aggregate Industry Operations (2020) Estimated Effect Output ($mil.) Employee Compensation ($mil.) Employment State Tax Revenue ($mil.) Direct $706.9 $178.6 2,392 $19.1 Indirect/Induced 592.6 278.3 6,060 $29.8 Total $1,299.5 $456.9 8,452 $48.9 Notes: Tax estimates assume an average tax rate of 10.7% of employee compensation based on state historical average tax shares reported by Census. Source: Census Bureau-Annual Survey of State Government Finances and RegionTrack estimates. The estimated direct state tax revenue in 2020 from annual aggregate industry activity is $19.1 million, or a 10.7% share of $178.6 million in employee compensation (Figure 19). Again, the tax estimates include income, sales, use, motor vehicle, and other taxes paid by aggregate producing firms to the state of Oklahoma. Estimates also include individual income tax payments made by employees of aggregate firms. Including economic spillover effects, estimated tax payments based on the same tax share include an additional $29.8 million paid to the state. In total, expected state tax revenue from the gross economic contribution of the aggregate industry reached $48.9 million in 2020. Oklahoma Non-Coal Production Fee. Some of the revenue received by the state of Oklahoma from the aggregate industry is in the form of fee income. The state of Oklahoma assesses all operators of non-coal mining operations a fee of one and one-fourth cents ($0.0125) per ton of mineral produced.28
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 45 Fee Coverage and Use. In assessing the fee, "mineral" means asphalt, clay, copper, granite, gravel, gypsum, lead, marble, salt, sand, shale, stone, tripoli, volcanic ash, and zinc, or any other substance commonly recognized as a mineral, and includes ores or rock containing any such substances, but excludes oil, gas and any other mineral found naturally in a liquid or gaseous state. The production fee was raised from one cent per ton in November 2017.29 Fee Revenue. Based on 2019 production of 81.45 million tons of aggregate, the fee is expected to generate an estimated $1 million annually. Figure 20 provides estimates of total fees due in the 2009 to 2019 period. Mining operations are required to file quarterly production and fee reports with ODOM. Figure 20. Estimated Non-Coal Mineral Production Fees Note: The production fee rate increased from $0.01 per ton to $0.0125 per ton in November 2017. Source: Oklahoma Department of Mines and RegionTrack calculations Fee Revenue Use. All fees on mineral production are deposited with the State Treasurer, who credits one- tenth of one cent ($0.001) per ton of fees collected to the Oklahoma Miner Training Institute Revolving Fund, with the balance of the fees deposited in the ODOM Revolving Fund. Expenditures from the ODOM Revolving Fund can be made for any lawful purpose of the department. Funds accruing to the Oklahoma Miner Training Institute30 Revolving Fund are fully appropriated and may be budgeted and expended by the Oklahoma Mining Commission.31 The Commission maintains a contract with the Board of Regents of Eastern Oklahoma State College for operation of the Oklahoma Miner Training Institute. 649,739 704,694 779,666 1,018,070 0 200,000 400,000 600,000 800,000 1,000,000 1,200,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 46 Sales and Use Tax Payments – State and Local Estimates of the amount of sales and use tax paid by the aggregate industry to state and local governments can be estimated using Oklahoma Tax Commission records. A portion of the sales made by firms in the aggregate industry are taxable and generate significant sales and use tax payments to state and local governments. Sales and use taxes paid by the aggregate industry are tabulated annually in the 2016 to 2020 period, the most recent five years for which NAICS sector based tax reporting is available. The data captures the eleven NAICS codes comprising the industry used throughout the report. The same fractional shares used earlier in the report are used for NAICS wholesale trade sectors 423320 and 423520. Specifically, the data measures the taxes collected on sales by the industry and then remitted to the Oklahoma Tax Commission. The estimates do not include sales and use taxes paid on purchases by aggregate producers, which cannot be extracted from publicly available data. Taxable Sales. Figure 21 summarizes both the amount of taxable sales and the resulting sales and use taxes collected and remitted to the state and Oklahoma cities and counties by the aggregate industry. In 2020, the state’s aggregate producers reported sales subject to state sales and use tax of $127.8 million. Of this amount, $53.3 million was taxable at the city level and $54.5 million taxable at the county level. Approximately 18.1% of total sales of $706.7 million in the industry in 2020 was subject to state sales and use tax. It is important to note that a substantial share of the sales of the aggregate industry are made to the same government entities who receive sales and use tax payments from the industry. These sales are typically for public construction projects and are exempt from sales and use taxes under state statute. Figure 21. Sales and Use Tax Base and Remittances – Aggregate Industry State 2016 2017 2018 2019 2020 2016-20 Sales/Use Taxable Sales 57,115,576 95,739,740 185,978,354 128,385,915 127,815,764 595,035,349 Sales/Use Tax Collections 2,570,201 4,308,288 8,369,026 5,777,366 5,751,709 26,776,590 Cities 2016 2017 2018 2019 2020 2016-20 Sales/Use Taxable Sales 31,998,686 54,533,207 104,563,858 69,199,432 53,321,929 313,617,112 Sales/Use Tax Collections 1,125,734 2,130,813 4,155,845 2,649,491 2,044,402 12,106,285 Counties 2016 2017 2018 2019 2020 2016-20 Sales/Use Taxable Sales 53,338,205 85,219,607 165,912,559 186,535,688 54,546,856 545,552,915 Sales/Use Tax Collections 629,854 750,173 1,482,342 1,397,561 996,672 5,256,602 State/Cities/Counties 2016 2017 2018 2019 2020 2016-20 Sales/Use Tax Collections 4,325,790 7,189,275 14,007,214 9,824,418 8,792,783 44,139,480 Source: Oklahoma Tax Commission and RegionTrack calculations
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 47 Tax Remittances. The state’s aggregate producers subsequently remitted $8.79 million in sales and use tax receipts to state, city, and county governments in Oklahoma in 2020. Of the total, $5.75 million (65%) went to the state, $2.04 million (23%) to cities, and $1 million (12%) to counties. The $5.75 million in sales and use taxes paid to the state represents approximately 30% of the estimated $19.1 million in total direct taxes paid by the industry to the state in 2020 (Figure 19). The trend in sales and use tax collections from aggregate industry activity is highly volatile over time. The recent peak in sales tax remittances by the industry was $14.0 million in 2018, nearly double the more recent 2020 level. The volatility reflects year-to-year changes in both aggregate production and the share of total aggregate sales that are tax exempt. From 2016 to 2020, Oklahoma aggregate producers remitted a cumulative $44.1 million ($8.8 million annually) in sales and use taxes to state, city, and county governments. Total remittances include $26.8 million in sales and use tax to the state, $12.1 million to cities, and $5.3 million to counties. City- and County-Level Sales and Use Tax Payments Figure 22 provides a breakdown of city and county sales and use taxes paid by the aggregate industy by the county in which taxable sales occurred. Payments are again provided for years 2016 to 2020 and totaled across the five-year period for each county. It is important to note that local area sales tax estimates are far more volatile on a year-to-year basis than statewide tax payments. Again, this reflects large year-to-year changes in total sales at the local level and changes in the share of total sales that are taxable. Some large one-time tax payments at the county level are traced to large construction projects. In 2020, sales and use tax payments totaling $3.0 million were remitted to city and/or county governments in 75 of the state’s 77 counties. Over the full period from 2016 to 2020, Oklahoma’s aggregate producers remitted a total of $17.4 million in sales and use tax payments, an average of $3.47 million annually. The aggregate industry in Oklahoma and Tulsa counties generated the most sales and use tax revenue among cities and counties in 2020. Tulsa County received the largest tax remittances with $572,300, followed by Oklahoma County with $482,200. This reflects the high concentration of end use in the state’s two largest counties despite significant production of the materials in other counties. Five additional counties received more than $100,000 in sales and use tax revenue in 2020 including Muskogee ($271,024), Murray ($122,332), Wagoner ($114,939), Sequoyah ($109,311), and Rogers ($100,143). Counties where city and county sales and use tax payments ranged from $50,000 to $100,000 in 2020 include Canadian, Cherokee, Cleveland, Ellis, Kingfisher, Okmulgee, and Wagoner. Over the full five-year period, Tulsa County’s city and county governments received the largest total remittances at $4.6 million, followed by Garfield County with $2.5 million and Oklahoma County with $2.1 million. No other county received more than $1 million in the period.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 48 Figure 22. City and County Sales/Use Tax Payments – Oklahoma Aggregate Industry County 2016 2017 2018 2019 2020 2016-20 Adair 14,292 4,912 13,186 23,032 20,368 75,791 Alfalfa 370 200 429 1,749 384 3,132 Atoka 683 4,491 8,477 10,658 6,212 30,521 Beaver 599 143 989 192 112 2,034 Beckham -24,189 125,938 65,931 86,383 6,240 260,303 Blaine 1,322 95,817 82,918 7,457 1,157 188,671 Bryan 21,559 6,113 5,622 7,828 24,583 65,705 Caddo 1,864 1,639 5,574 444 308 9,828 Canadian 36,471 40,342 110,545 85,218 68,829 341,404 Carter 11,169 1,380 6,871 11,143 11,496 42,058 Cherokee 1,084 1,134 86,400 58,902 86,687 234,207 Choctaw 4,920 -854 1,911 1,915 918 8,811 Cimarron 0 58 41 0 0 99 Cleveland 118,364 74,980 45,115 56,826 81,206 376,491 Coal 18,150 841 2,305 -1,319 64 20,042 Comanche 2,390 941 1,364 2,067 2,336 9,098 Cotton 4 56 1,347 264 5 1,676 Craig 296 241 88,974 46,663 38,583 174,757 Creek 29,150 49,285 191,333 58,517 28,941 357,227 Custer 1,104 36,785 44,845 15,633 1,311 99,679 Delaware 5,277 4,140 9,108 11,703 8,888 39,115 Dewey 5,571 18,096 13,790 27,736 44,427 109,619 Ellis 3,111 19,460 536,978 219,033 93,282 871,863 Garfield 1,351 548,651 1,668,867 255,698 29,672 2,504,239 Garvin 2,474 2,975 2,050 2,459 5,276 15,234 Grady 6,431 6,763 25,730 5,324 9,275 53,522 Grant 173 30 33 125 386 747 Greer 83 17 307 137 306 851 Harmon 3 2,791 10 0 0 2,804 Harper 2,033 968 806 490 805 5,103 Haskell 19,493 21,008 31,836 39,596 23,949 135,881 Hughes 1,186 3,473 4,110 3,255 -93 11,931 Jackson 264 657 263 195 1,533 2,911 Jefferson 3,178 2,096 -41 2,428 5,451 13,112 Johnston 54,239 49,566 -87,707 27,167 29,274 72,539 Kay 1,149 6,418 1,728 1,287 21,330 31,912 Kingfisher 14,913 30,601 34,987 73,390 95,979 249,870 Kiowa 7,164 10,599 13,190 9,272 6,807 47,033 Latimer 1,192 236 185 434 59 2,105 Le Flore 4,214 9,216 18,194 24,743 23,886 80,254 Lincoln 11,123 10,766 9,918 13,443 21,029 66,279 Logan 7,756 5,700 6,807 5,245 30,210 55,718 Love 1,189 7,515 6,510 3,666 617 19,498 McClain 8,819 10,724 19,135 17,786 31,949 88,413 McCurtain 4,745 403 4,657 2,364 876 13,045 McIntosh 286 362 8,452 156 1,594 10,850 Major 293 1,430 2,520 5,024 102 9,369 Marshall 16,452 6,760 11,045 15,105 11,637 60,998 Mayes 1,482 5,833 17,189 8,979 47,795 81,278 Murray 45,823 54,119 69,883 88,176 122,332 380,333 Muskogee 2,750 5,908 97,961 148,226 271,024 525,869 Continued
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 49 Figure 22. (Continued) City and County Sales/Use Tax Payments – OK Aggregate Industry County 2016 2017 2018 2019 2020 2016-20 Noble 286 82 158 331 13 870 Nowata 2,381 4,618 5,205 4,641 14,770 31,616 Okfuskee 3,127 3,788 21,334 7,549 27,506 63,304 Oklahoma 386,373 426,420 442,673 361,258 482,201 2,098,925 Okmulgee 11,974 10,973 6,573 31,581 54,851 115,953 Osage 9,969 18,613 35,487 30,283 32,532 126,884 Ottawa 847 765 1,308 1,880 1,678 6,479 Pawnee 1,012 961 1,661 2,128 4,083 9,846 Payne 3,472 7,941 11,880 5,663 7,394 36,349 Pittsburg 1,201 1,125 3,764 21,355 49,727 77,171 Pontotoc 41,225 98,695 85,952 108,855 40,921 375,648 Pottawatomie 28,571 30,663 28,580 33,374 44,303 165,490 Pushmataha 0 384 411 583 255 1,632 Roger Mills 195 858 2,587 258 1,463 5,361 Rogers 161,731 169,518 170,025 181,837 100,143 783,252 Seminole 6,771 57,272 23,019 32,542 17,236 136,841 Sequoyah 22,086 16,055 84,448 83,579 109,311 315,479 Stephens 1,128 3,519 3,202 3,411 6,366 17,626 Texas 1,865 208 61 377 66 2,576 Tillman 550 7,184 213 208 4,377 12,532 Tulsa 523,169 642,223 1,301,755 1,568,414 572,257 4,607,818 Wagoner 43,590 53,646 80,201 57,474 114,939 349,850 Washington 13,896 24,580 22,219 15,268 20,702 96,665 Washita 1,965 1,330 567 2,040 920 6,822 Woods 1,823 -56 979 101 3,736 6,583 Woodward 12,564 7,899 11,246 5,848 9,927 47,484 State Total 1,755,589 2,880,987 5,638,188 4,047,051 3,041,074 17,362,889 Source: Oklahoma Tax Commission and RegionTrack calculations Counties with little aggregate production generally receive very little annual sales and use tax revenue from the industry, while some counties receive it only in occassional years. However, across the full 2016 to 2020 period, city and/or county governments in all 77 Oklahoma counties received some sales and use tax revenue from aggregate production. Local Ad Valorem Tax Revenue Ad valorem, or property, tax payments at the local level are an additional source of tax revenue paid by the aggregate industry. Aggregate producing firms in Oklahoma typically have significant holdings of real and personal property that are subject to county ad valorem taxation. Much like oil and gas taxation in the state, the value of minerals in the ground are not taxed. However, the land where mining occurs is taxable along with equipment used in production. The amount of 2020 ad valorem tax payments were collected for the 50 largest aggregate producing sites across Oklahoma. Only 50 sites were surveyed due to both the costly nature of a manual search and the finding that the 50 largest producing sites are believed responsible for the great majority of total ad valorem tax paid by the industry statewide.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 50 Ad valorem tax payments were collected directly from county assessor websites and other property record providers. Included property includes real property primarily in the form of mines, quaries, and pits used in the aggregate mining process plus any related personal property. Property unrelated to active aggregate mining such as undeveloped land, concrete plants, residential property, and corporate property, are excluded from the totals. Figure 23 details total estimated ad valorem tax payments for 2020 associated with the 50 largest aggregate producing sites in the state by the county in which each site is located. Tax payments for the 50 sites totaled $6.42 million for the 2020 tax year. Figure 23. Ad Valorem Tax Payments – 50 Largest Producing Sites County Ad Valorem Tax (2020) Atoka $259,842 Blaine 151,505 Bryan 74,470 Caddo 59,475 Carter 69,849 Cherokee 46,129 Choctaw 175,646 Cleveland 30,930 Comanche 347,533 Cotton 25,500 Creek 102,676 Dewey 540,700 Haskell 20,095 Jackson 336,818 Johnston 797,384 Kingfisher 103,946 Kiowa 111,521 Logan 33,228 Major 51,541 Mayes 419,772 McCurtain 16,001 Murray 552,373 Muskogee 130,416 Oklahoma 90,642 Pittsburg 114,920 Pontotoc 1,238,553 Rogers 131,177 Sequoyah 284,331 Tulsa 81,762 Wagoner 20,293 50 Largest Producing Sites $6,419,028 Note: Includes only real and personal property engaged directly in mining activities. Source: Property records from county assessor websites, okcountytreasurers.com, oktaxrolls.com. okcountyrecords.com.
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ECONOMIC ROLE OF OKLAHOMA’S AGGREGATE INDUSTRY Page 51 Based on the rapid falloff in tax payments beyond the 50 largest sites, the $6.42 million total is believed to represent at least 90% of the total ad valorem taxes associated with all 417 operating sites across the state. For example, the ten largest sites averaged annual taxes of $406,500 each while the sites ranked 41- 50 in production averaged only $7,600 each in annual taxes. A sample of smaller firms suggests that the 200 smallest sites paid $1,000 or less annually in ad valorem taxes. The 50 largest sites are spread across 30 counties and are located in all regions of the state. There is also a significant share of total ad valorem tax revenue received by counties in rural areas of the state. Comanche County is the only metropolitan area county ranked among the top ten in ad valorem tax payments. The largest tax payments were made to Pontotoc County and totaled $1.24 million. Three additional counties received more than $500,000 in ad valorem tax from the aggregate industry – Johnston ($797,384), Murray ($552,373), and Dewey ($540,700). Five additional counties received between $250,000 and $500,000 in ad valorem payments from the industry – Mayes ($419,772), Comanche ($347,533), Jackson ($336,818), Sequoyah ($284,331), and Atoka ($259,842). Thirteen counties received less than $100,000 in ad valorem taxes. These sites generally have either far less production than the largest sites or the county is home to only one top 50 site.
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ECONOMIC ROLE OF OKLAHOMA’S PUBLIC COLLEGES AND UNIVERSITIES Page 52 VII. Endnotes 1 Mining rules and regulations in Oklahoma are available online at: https://mines.ok.gov/regulations 2 Recent production reports from the Oklahoma Department of mines are available online at: https://mines.ok.gov/oklahoma-mining-production 3 The most recently available data on aggregate production extends through 2019. 4 See the Oklahoma Historical Society’s report on mining and minerals in Oklahoma: https://www.okhistory.org/publications/enc/entry.php?entry=MI041 5 For more details, see: https://www.cement.org/cement-concrete/concrete- materials/aggregates#:~:text=Aggregates%20are%20inert%20granular%20materials,an%20essential%20ingredie nt%20in%20concrete.&text=Fine%20aggregates%20generally%20consist%20of,3%2F8%2Dinch%20sieve. A more technical guide to the use of aggregates in concrete is available from the American Concrete Institute at: https://www.concrete.org/Portals/0/Files/PDF/E1_07.PDF 6 The concrete plant count is as of September 20, 2021. An additional 119 concrete plants did not have current inspection status. A current list of approved concrete plants is available online from ODOT: https://www.odot.org/materials/htm-smap/11067cp.pdf 7 For more details, see: https://www.apai.net/Files/content/DesignGuide/Chapter_2B.pdf 8 The asphalt plant count is as of September 20, 2021. An additional four asphalt plants did not have current inspection or scale certification status. A current list of approved asphalt plants is available online from ODOT: https://www.odot.org/materials/htm-smap/11067ap.pdf 9 For more detailed maps of Oklahoma’s major mineral deposits, see: http://www.ogs.ou.edu/pubsscanned/EP9p10_11minoilgas.pdf and https://www.researchgate.net/publication/307575678_Mineral_map_of_Oklahoma_exclusive_of_oil_and_gas_ fields 10 For context on tripoli deposits in Oklahoma, see: http://ogs.ou.edu/docs/bulletins/B28.pdf and https://americantripoli.com/about/ 11 For discussion of caliche deposits in Oklahoma, see: https://ojs.library.okstate.edu/osu/index.php/OAS/article/view/2329/2030 12 For more detailed descriptions of the activities associated with these nine 6-digit NAICS codes, see: https://www.naics.com/six-digit-naics/?code=21 13 See: https://www.ou.edu/ogs/research/minerals/gypsum 14 Data describing the industry are the state level are fully disclosed in these datasets. However, some estimates are formed at the 6-digit level for counties with suppressions using iterative proportional fitting techniques. The initial starting value, or prior, is formed using an average of the industry ratio at the state level and the industry average at the national level for each missing data point. All estimates are then iteratively adjusted to sum to known state totals. 15 Census defines nonemployers as: “A nonemployer business is one that has no paid employees, has annual business receipts of $1,000 or more ($1 or more in the construction industries), and is subject to federal income taxes. Nonemployer businesses are generally small, such as real estate agents and independent contractors.” For additional context, see: https://www.census.gov/quickfacts/fact/note/US/NES010218#:~:text=A%20nonemployer%20business%20is%2 0one,estate%20agents%20and%20independent%20contractors. 16 Establishments, employment, and total compensation are derived from the Bureau of Labor Statistics Quarterly Census of Employment and Wages using the same eleven NAICS code comprising the aggregate industry.Some county estimates are not disclosed due to confidentiality concerns and are estimated using data
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ECONOMIC ROLE OF OKLAHOMA’S PUBLIC COLLEGES AND UNIVERSITIES Page 53 from the County Business Patterns database. Iterative proportional fitting techniques are used to control the county-level estimates to known state totals. 17 This implies that firms based outside the county perform some extraction within the county. 18 RIMS (Regional Input-Output Modeling System) II multipliers are discussed in detail at: https://apps.bea.gov/regional/rims/. Multipliers used in the report are based on the 2019 regional update of the 2012 U.S. input-output model underlying the RIMS II estimates. 19 Caution must always be used when using input-output multipliers to assess the total ‘contribution’ or total economic activity ‘supported’ by an existing industry or firm. Input-output multipliers are designed to predict the gross changes in a regional economy resulting from a small, incremental change in its current structure. More specifically, the estimates provided for the aggregate industry reflect predictions from the RIMS II input- output model of the incremental impact that would result if industry activity expanded incrementally. The actual realized impact is determined by the unique adjustment process that would take place in the state as aggregate industry activity changed. For an accessible discussion of how multiplier-based estimates of spillover effects are frequently misused and often overstate resulting spillover effects, see Hughes, David W. (2003) “Policy Uses of Economic Multiplier and Impact Analysis.” Choices. 2nd Quarter. https://extension.tennessee.edu/publications/Documents/W644.pdf and Olfert, M.R. and J. C. Stabler (1994) “Community Level Multipliers for Rural Development Initiatives.” Growth and Change, 25: pp. 467– 486.https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-2257.1994.tb00155.x. 20 While the input-output approach provides a useful way to measure the extent of the economic interlinkages within a regional economy, the approach is not without shortcomings. The primary criticisms of the approach are misapplication of the models and the failure of the largely static approach to account for changes in other areas of the economy such as prices, wages, and traded activity. Despite these criticisms, careful application of the models can provide useful estimates of the total gross economic activity attributable to an individual industry, firm, or institution within a region. Input-output analysis is most appropriate when the policy change or stimulus does not alter production patterns, product prices, input prices, wage rates, or cost of capital. It is generally most useful when there are no capital or labor constraints. 21 All sectors in NAICS 21231 and 21232 are modeled using RIMS sector 212310. NAICS 212399 is modeled using RIMS sector 2123A0. NAICS 213115 is modeled using RIMS sector 21311A. NAICS sectors 423320 and 423520 are modeled using RIMS sector 420000. 22 The three-step process of matching the components of the aggregate industry to RIMS sectors, modeling the individual effects, and then aggregating the individual contributions of the components is often termed analysis- by-parts. It is technically equivalent to modeling the activity as a single entity, but the process can produce more appropriate impact estimates when the activities being modeled do not fit precisely within a single RIMS II industry sector. 23 We do not attempt to formulate a comprehensive net cost-benefit analysis of the state’s aggregate industry. There are many relevant components to a net analysis that extend well beyond the direct economic role of the industry. These include social costs and benefits, alternative uses of state and local funding, alternative options for providing aggregate material in the state, and the deadweight economic loss that can occur in the private sector because of taxpayer funding of services. 24 We do not construct a counterfactual scenario that represents an alternative comparative view of the state economy that removes the aggregate industry and its various interrelationships from the structure of the model. Devising a sound counterfactual analysis that represents a reasonable alternative use to products from the aggregate industry presents a considerable modeling challenge. It is not at all clear what the proper counterfactual should be in assessing the economic role of aggregate production. 25 This approach to estimating the tax contribution of the industry reflects the lack of administrative data on the incidence of state and local taxation by industry in most states, including Oklahoma. An average tax rate assumes the aggregate industry pays taxes, across the full range of taxes, at the same rate as all industry sectors. The estimates can be adjusted upward or downward based on the degree to which the industry is believed to pay more or less tax on average. Payments also differ substantially by industry across the various types of tax paid.
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ECONOMIC ROLE OF OKLAHOMA’S PUBLIC COLLEGES AND UNIVERSITIES Page 54 26 See: Urban Land Institute, 2020. “State and Local Finance Data.” https://state-local-finance- data.taxpolicycenter.org/pages.cfm 27 The removal of taxes paid on oil and gas production before calculating the average tax rate removes the potential inflation of the rate by severance tax payments on oil and gas. 28 See Oklahoma’s Mines and Mining statutes at: https://oksenate.gov/sites/default/files/2019-12/os45.pdf 29 See: https://mines.ok.gov/mineralnon-coal 30 See: https://mines.ok.gov/oklahoma-miners-training-institute-omti 31 See: https://mines.ok.gov/oklahoma-mining-commission
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ABOUT THE STATE CHAMBER RESEARCH FOUNDATION The State Chamber Research Foundation (SCRF) is the business community’s think tank. Through high-quality research and analysis, SCRF educates policymakers and the public about the virtues of the free enterprise system, the public policy ideas that enable free enterprise to thrive, and the positive contributions of the business community to the prosperity and welfare of the people of Oklahoma. As a non-profit, non-partisan research and education organization, SCRF is dedicated to the non-partisan advancement of free markets, increasing opportunity, and growing prosperity. Visit us at www.okstatechamber.com/foundation.