Cushing: America's Oil Hub
How the influence in the growth of Cushing, Oklahoma's, oil industry has contributed to the growth of the town's economy.
By Wade Haugen, Danielle Gerritzen, Kailee Jaques, Dani Dalla & Taryn Johnson
Cushing, Oklahoma, is home to one of the most important and influential factors of the world’s economy: oil.
The small town has served to be a vital oil transport point in Oklahoma for decades with a multitude of intersecting pipelines, storage facilities and access to many different refineries and suppliers. Crude oil flows inbound to Cushing from all directions and outbound through dozens of pipelines. Cushing is also the price point for West Texas Intermediate oil prices, which is the most traded oil futures contract in the world. The amount of crude oil stored in the town controls a vast number of the world’s oil prices.
Cushing’s city manager, Terry Brannon, is a lifetime resident of the town and said the town’s economy has, and continues, to improve because of the increase in the amount of oil pipelines, refineries and suppliers.
“We have multiple pipelines here,” Brannon said. “Cushing is the Pipelines Crossroads Capital of the World.”
Because Cushing holds this title, Brannon said nearly every major oil company in America has assets in the town, including two major Canadian companies; Enbridge and Trans-Canada.
“It gives us international identity,” Brannon said. “It gives us an opportunity to employ people. We have people here who have very good jobs out there because those jobs pay awfully well.”
Brannon also said in return, a lot of the oil companies make reinvestments into the community through philanthropy projects. The companies not only invest their people, resources and time but also invest their money directly back into Cushing.
“The city of Cushing itself and many other organizations in the city are direct benefactors as a result of the generosity of some of the oil companies here,” Brannon said. “There are a lot of benefits in having those folks as part of our community. Many of them are true community partners.”
Derek Griffith, Cushing’s fire chief deputy, has been a resident of the town since the third grade, and therefore, has seen similar improvements in the economy as that of Brannon.
“The industry absolutely has an impact on our economy, 100%,” Griffith said, “We’ve seen great growth in the amount of terminals and the amount of above ground storage that we have here, as well as the pipelines that supply each terminal.”
Ninety-five percent of Cushing’s terminals are located outside the city limits but still remain within the county boundaries. Cushing, however, is the closest town to the oil terminal stores and therefore, reaps all of the sales tax benefits from them. Griffith said the number of jobs the oil companies have created for the town is substantial as well.
While the large presence of the oil and gas industry has boosted Cushing’s economy, it has also contributed greatly to the schools.
The Cushing school district doesn’t receive any per-pupil funding from the state of Oklahoma. Instead, its funding comes from ad valorem taxes from the town. Ad valorem taxes are based on the assessed value of something, whether that be real estate or personal property. Ad valorem taxes can also come from import duty taxes on goods from abroad.
Cushing’s assistant superintendent, Melissa Amon, has been an employee of the school district for 22 years, but her roots in the town extend much deeper than that. She moved to Cushing when she was two and her dad, Bill Hall, was the pipeline superintendent for the Drumright district of Kerr-McGee Corp.
Amon said the presence of the oil and gas industry has been huge for the school district.
"Our biggest taxpayers are the oil and gas companies,” Amon said. “It's mainly because we have the storage here. When they store the oil here for a certain amount of time, I don't know all the details, but once the oil is stored here for so long it's taxable, and so they have to pay taxes on it. Also, all the tanks themselves are considered property and goods that those companies have to pay taxes on. That has benefitted us as far as the school goes because we get those ad valorem taxes."
Koln Knight arrived as the superintendent of Cushing schools in 2009, just in time for oil activity to flourish in the town. Knight said when he arrived, much of the building for the storage facilities was starting to take place. He said because the district doesn’t have to rely on state funding, now it has been able to make technology improvements and facility repairs out of the district’s operating funds; whereas in the past it would have had to pass a bond.
Amon, who worked in the curriculum department before becoming the assistant superintendent, said the money coming from the ad valorem taxes has allowed the district to improve in a multitude of areas, areas that might not have been improved if the district had to rely on state funding.
"We've been able to do improvements all across the board,” Amon said. “We've been able to adopt textbooks. All our books are brand new. We've got chrome books for all of our students in grades two through 12. We've done building improvements and all kinds of stuff. Athletic facility improvements have also been a part of that.”
"You see all the athletic stuff because it sits on the outside, but you don't necessarily see all the stuff on the inside. It's definitely been all the way across the board. We're lucky to have done all the things we have for our kids all the way across the board academically."
Amon said she doesn’t think all these improvements could have been completed without the presence of the oil and gas industry in Cushing.
When Amon’s family moved to Cushing in the early ‘70s, there were only three houses for sale in town. She said she remembered times when all the houses were filled, and construction companies couldn’t build houses fast enough. For anyone familiar with towns heavy into the oil industry, there is often ebbs and flows, which is a consequence of such a volatile industry.
However, Amon said because of the emphasis on oil storage Cushing has regained its stabilization, which directly impacts the schools. Amon said regardless of how the industry is doing, the storage tanks will always be there.
"As far as for the school goes, the tanks are there,” Amon said. “The oil is there. When the price of oil drops sometimes, there's more oil being stored here because those companies are holding onto it until it's worth more; so we're not really in a super volatile position. The tanks are there. They're already full. They aren't going anywhere.”
10/2/19