OKOGA Voices Discord With OEPA’s Gross Production Tax Hike Proposal

The oldest energy trade association in the United States is vehemently opposed to another state energy alliance’s proposal to raise Oklahoma’s gross production tax to 7 percent.

“It’s disappointing to see well-respected Oklahomans use such misleading arguments to push for job-killing tax increases,” said Chad Warmington, president of the Oklahoma Oil and Gas Association (OKOGA).

Warmington took aim at a recent proposal by the Oklahoma Energy Producers Alliance (OEPA) which calls for a tax hike on the state’s most prolific industry.

“Those who formed OEPA are not drilling new wells, making new and significant capital investments in the state, or creating new jobs,” said Warmington. “In other words, they are not currently participating in the type of activity that will lead our state out of two years of a struggling economy. OKOGA member companies have largely contributed to the 2,800 jobs the energy sector created in Oklahoma in January and February. We are supporting policies at the state capitol that will allow this type of growth to continue so that we can close the budget gap and continue to be the top revenue stream for education, roads, and critical services in Oklahoma. For an industry that pays four times as much in taxes per employee as other Oklahoma industries, another tax hike on the state’s number one job creator is not the solution.”

In a press release issued on Tuesday, the OKOGA disputed five key points advanced by the OEPA. The controversial elements involve:

(1) Oklahoma’s current gross production tax rate;

(2) alleged replacement of vertical wells paying 7 percent tax with horizontal wells paying 2 percent tax;

(3) whether a production tax increase demonstrates a commitment to help solve the state’s budget crisis when compared with drilling and producing new oil and gas wells;

(4) OKOGA’s priority bill — Senate Bill 284 – maligned as “a direct assault on the property rights” of Oklahoma’s oil and gas producers; and

(5) whether Oklahoma is restricting long lateral drilling of horizontal wells or blindly permitting it to occur through the industry’s flex of corporate muscle.

The OEPA will hold a rally at the State Capitol on Wednesday prior to meeting with legislators, according to a report by The Tulsa World. Former Tulsa Mayor Dewey Bartlett Jr. is pegged as one of the rally speakers.


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