Energy Battle is Set….Small Producers Challenge Oil Giants

A rally is planned Wednesday at the State Capitol by a newly-formed group called the Oklahoma Energy Producers Alliance. It’s a group of small oil and natural gas producers who are calling on the legislature to restore the gross production tax from 2% to 7% on all oil and natural gas. And they are taking aim at the oil giants.

The group contends it would generate an additional $200-250 million a year. The Wednesday rally will be held at 10 a.m. in the grand staircase inside the South wing of the capitol building.

“We are the traditional oil and natural gas producers. We are a new group, but not new to the industry or to Oklahoma,” said co-chair Lee Levinson, a Tulsa attorney and oilman. “Our companies, owners, employees and vendors are spread out all across our state.”

Former Tulsa mayor Dewey Bartlett Jr. is supporting the group and will speak at the Wednesday morning rally.

“Our new group supports restoring the gross production tax to 7 percent across the board,” said Bartlett, owner of Keener Oil and Gas in Tulsa. “The fact that Oklahoma, a state with prolific oil and gas reserves and the nation’s best oil industry regulatory climate, already has the lowest tax rate in the nation at the historical 7 percent rate should be good enough.”

He said it makes no sense to allow horizontal drills to tap into oil plays and pay only 2 percent tax.

“We must face the stark reality that state government is bankrupt. We are staring at a second straight billion-dollar deficit in state funding. Our schools are in a funding crisis,” said Bartlett. “We believe the oil industry should stand up and agree that returning the oil and gas production tax to its historical level demonstrates our commitment to help solve this serious state budget crisis.”

The Alliance is also pushing another effort to legislators.

“We small oil and gas producers want lawmakers to defeat all bills aimed at increasing the ability of these mostly out-of-state oil giants to drill lateral lines for two miles, ignoring existing oil leases and mineral ownership that, in some cases have been in place for decades,” said Levinson.

“Senate Bill 284 and SB 669 are a direct assault on the property rights of every traditional oil and gas producer in Oklahoma,” he added. “No other state permits these ‘big boys’ to just waltz in and drill these long, horizontal wells—drilling into existing production zones. This legislation will destroy legal protections that have been the law for 100 years.”

 

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