The Oklahoma House Energy Committee heard a study, led by Chair Rep. Nick Archer, R-Elk City, examining the Oklahoma Corporation Commission’s (OCC) regulation of the state’s oil and gas industry, including workforce challenges, orphan well plugging and seismic activity.
Archer said the study was designed to give legislators and stakeholders a clear look at the OCC’s current operations, regulatory responsibilities and funding concerns.
“The Legislature must work with OCC to find solutions to the issues and gaps facing the agency, especially in the protest docket,” Archer said. “If we remove barriers and work with Oklahoma’s oil and gas industry, we can help the Commission fulfill their mission and regulate the industry effectively while protecting jobs, revenue and public safety. But first, they need the resources, tools and authority to do their job well rather than the current slow, inefficient process.”
Jeremy Hodges, director of the OCC’s Oil and Gas Conservation Division, emphasized the gap between industry revenues and OCC funding. “We regulate this industry with less than one percent of the revenue that we bring in,” he said.
One of the study’s central topics was delays to the protest docket, which is OCC’s process for hearing contested oil and gas cases. Brandy Wreath, Director of Administration at the OCC said frequent continuances, attorney scheduling conflicts and a shortage of court reporters and judges have slowed the docket significantly. Since these cases can involve major projects and millions in production, delays on the protest docket can have a significant economic impact.
Wreath added that both court reporters and judges who work on the protest docket are “grossly underpaid” and plans to ask for a legislative carveout to pay competitive salaries.
Archer asked how to prevent abuse of the protest docket system. He pointed to a large producer who is facing protests from entities that, rather than having an actual issue with the case, were instead trying to gain a better understanding of it.
Wreath said the Commission has done what they can to address abuse of the system, but they’re still limited by the lack of attorneys and judges.
Another major focus of the study was Oklahoma’s backlog of orphan wells. Hodges said, at the current pace, it would take over 200 years to plug every orphan well in the state. Deputy Director Mike McGinnis added that even after plugging around 4,500 wells with the latest federal grant money, more than three-quarters of Oklahoma’s orphans wells will remain.
The committee also reviewed induced seismicity and regulatory strategies. Wreath said that OCC, industry leaders and legislators need to work together to determine policies moving forward.
“I think it’s one area where we failed is one side of the equation comes up with an idea that we’re not all in agreement [with] when we leave the table,” he said. “Even if we don’t get what we want, we need to figure something out that every size of producer can agree to, that the Legislature can agree is right, the commissioners can agree, because they’re gonna be issuing the orders, and then we all leave with the same marching orders and say this is what we’re gonna do as a state.”
Other topics discussed during the study included public safety and emergency response, staffing challenges, modernization efforts and statutory clean-up, as well as a detailed breakdown of OCC’s funding.
“Let’s hone in on those funding needs and opportunities so that we can look to help move the ball forward for, as noted multiple times, our state’s largest highest employing industry,” Archer said at the end of the meeting.
