Oklahoma House Speaker Charles McCall’s push for an electricity production tax on renewable energy sources in the state just renewed an age-old fight between the oil and gas industry and the firms behind wind and solar operations
His creation of the tax in the form of HB2950 stunned the wind and solar industry in the state. But this week, the oil and gas industry turned the bill into an advertising fight, urging support for the Speaker’s bill which won approval last week in a House Committee.
“Not a new issue for us,” said Cody Bannister, Senior Vice President of Communications for the Petroleum Alliance of Oklahoma. “We’re happy there’s finally a discussion.”
McCall’s bill came to light last week after wind operator, NextEra Energy maintained its strong opposition to giving utilities the Right of First Refusal in construction of major transmission lines. ROFR, as it’s often referred to, drew opponents and proponents over the past year when it was first introduced.
NextEra Energy was considered one of the leading opponents and it reportedly angered the House Speaker who told a House GOP caucus he was going after NextEra. It came in the form of his Committee amendment to HB2950, ostensibly an income tax cut measure. But buried in the bill is McCall’s proposed tax on renewable energy, including wind power, solar power, geothermal energy, biomass and hydroelectric power. The tax would be a levy of $1 per megawatt-hour of electricity produced by “a renewable power business within the state.”
That prompted the oil and gas industry to resurrect its public opposition to largely, the wind industry, although others believe solar power in Oklahoma will soon be in large development.
“The wind industry is a competitor for natural gas and that’s not a good idea,” added Bannister who believes there will be more renewable energy growth in the state thanks to the federal mandates coming from the Biden administration.
It was in the 2023 legislative session when Petroleum Alliance President Brook Simmons raised the idea of taxing wind and solar. It was in response to Senate President Pro Tempore Greg Treat’s comments during a press conference where he suggested raising the gross production tax on oil and natural gas.
“Any discussions on increasing taxes on energy production, even hypothetical, should begin and end with instituting a statewide production tax on wind and solar,” said Simmons in a statement at the time.
“We are not, however, an “all of the above” state when it comes to energy taxation. Only the oil and natural gas industry pays a statewide gross production tax on the energy it produces.”
Simmons noted last year that tax consuming industries in Oklahoma were paing less than nothing. He charged that since 2013, Oklahoma taxpayers statewide had paid more than $1.25 billion in subsidies for wind power generation and hundreds of millions of dollars more were set to be paid out through 2026.
This week’s oil and gas industry ads supporting McCall aren’t the first time the fight has gone public against the wind industry. In 2016, the oil and gas industry resorted to billboards to target the tax credits for the wind industry.
One declared, “Cost to Oklahoma taxpayers in 2016 is $242 million. Out-of-state wind companies benefited. That BLOWS.”
Turned out the billboard campaign was promoted by the Windfall Coalition, a nonprofit group started by Harold Hamm, the billionaire founder of Continental Resources. Hamm was supported by Pete Delaney, the former Chairman and CEO at OGE Energy Corp. Another supporter was Jeff McDougall, President of JMA Eenrgy Co.
The coalition even took out a full-page ad in The Oklahoman at a price of $33,000. It was met by resistance from the wind industry which countered with its own billboards. The wind operators had support from Stillwater Rep. Cory Williams, a Democrat who wondered why the wind industry received the focus.
“Because that’s where we’re being told to look. Who is telling us to look there? The Windfall Coalition. Who is running that? Harold Hamm. The greed of oil and gas in Oklahoma and the ineptitude of politicians is like nothing you’ve seen.”