Hey Oklahoma legislature……wake up! It’s the strong message delivered to the leaders of the state House and state Senate from Brook Simmons, president of the Petroleum Alliance of Oklahoma.
He fired off a letter this week explaining that the decisions by Devon Energy and Expand Energy to move their headquarters to Houston, Texas and the impact on the state’s oil and natural gas industry were overblown and it is not in decline.
“To borrow from Mark Twain: Reports of the oil and natural gas industry’s Oklahoma demise are greatly exaggerated! Despite clutch-your-pearls comments from elected locals and business development officials who really should know better, Oklahoma will remain a highly specialized oil and natural gas economy after Devon Energy and Expand Energy move their headquarters to Houston,” wrote Simmons.
He informed the House and Senate leaders that oil and gas in Oklahoma will remain a “primary driver” of the state’s economy for our lifetimes.
In referencing the decisions of Expand Energy and Devon Energy to relocate their headquarters to Houston, Simmons blamed the legislature in part.
“No state wants to admit it has lost a defining legacy business to a rival, but these departures serve as a wake-up call for lawmakers. The seeds for these headquarters decisions were planted by the Oklahoma Legislature a decade ago.”
Simmons was critical of the legislature for raising taxes on the industry in the past several years.
“f you want less of something — fewer leading Oklahoma businesses, less oil and natural gas production, and ultimately less revenue for public policy priorities — raise taxes on that thing and treat it with disdain as lawmakers did from 2015 to 2018.
As one oil and natural gas CEO said, “The Houston skyline is a monument to poor public policy decisions in Louisiana and Oklahoma.””
He also wrote that lawmakers paid “lip service” to oil and gas and a majority care “only that the industry simply hangs around to pay the bill while Oklahoma chases the latest, disappointing shiny object.”
Simmons also offered some advice to the legislative leaders including:
Emphasize Natural Gas as Oklahoma’s Growth Engine Instead of Wind, Solar and Battery Storage
Stop the Gaming of the Ad Valorem Tax System
Tax Relief
Simmons told the leaders their actions this legislative session could begin the process of reversing “policy-inflicted” design and restoring the state’s competitive edge as a national leader in oil and natural gas development.
“You can send a clear signal that Oklahoma once again welcomes the industry that built this state. Our bedrock industry is already investing, hiring, and growing here.”
Below is the letter in entirety:
Dear Mr. President and Mr. Speaker,
To borrow from Mark Twain: Reports of the oil and natural gas industry’s Oklahoma demise are greatly exaggerated!
Despite clutch-your-pearls comments from elected locals and business development officials who really should know better, Oklahoma will remain a highly specialized oil and natural gas economy after Devon Energy and Expand Energy move their
headquarters to Houston.
In all likelihood, the industry will remain the primary driver
of Oklahoma’s economy for the rest of our lifetimes, but this cannot be taken for granted as it has been.
The economic driver for Oklahoma is capital investment that turns oil and natural gas assets into revenue with a drill bit. That activity is the driver for more than half of Oklahoma’s real annual GDP growth and impacts all other non-federal revenue streams flowing to state coffers.
For perspective, Expand Energy (then Chesapeake Energy) sold the vast majority of its Oklahoma oil and natural gas assets a decade ago and has not drilled a well in Oklahoma since 2020.
Meanwhile, Devon Energy’s focus since the 2018 enactment of
HB 1010XX has been outside Oklahoma. Its current drilling program consists of only one of the 46 rigs actively working in the state.
According to the U.S. Bureau of Labor Statistics, there were 971 oil and natural gas extraction companies in the OKC Metropolitan Statistical Area in 2025 and about 2,700 such E&P companies statewide. Add in the drilling, service, machine & equipment manufacturing, petroleum product manufacturing, refining, pipeline, geophysical, surveying & mapping, and other key industry sectors and Oklahoma’s oil and natural gas cluster tops 3,538 businesses. Most don’t have tall buildings or expansive campuses so you don’t notice them.
On that front, the complete data for 2023 show Oklahoma’s crude oil and natural gas industry is responsible for:
• $60.3 billion in total statewide economic impact,
• 23% of total statewide economic activity,
• $54.3 billion in household earnings,
• $1 in $5 of total statewide household income,
• 1 of every 10 jobs, and
• $3.2 billion in total taxes (20.6% of all the federal, state & local taxes paid in Oklahoma)
Additionally, we estimate the industry is responsible for more than $45 billion in royalty payments to mineral owners over the past 20 years. There simply is no other industry that comes close to driving this kind of economic activity.
No state wants to admit it has lost a defining legacy business to a rival, but these departures serve as a wake-up call for lawmakers. The seeds for these headquarters decisions were planted by the Oklahoma Legislature a decade ago.
If you want less of something — fewer leading Oklahoma businesses, less oil and natural gas production, and ultimately less revenue for public policy priorities — raise taxes on that thing and treat it with disdain as lawmakers did from 2015 to 2018.
As one oil and natural gas CEO said, “The Houston skyline is a monument to poor public policy decisions in Louisiana and Oklahoma.”
Over the years, many lawmakers have paid lip service to the oil and gas industry, but their collective actions over the past decade signal that a majority care only that the industry simply hangs around to pay the bill while Oklahoma chases the latest, disappointing shiny object.
From 2019 to 2024 Oklahoma was the only U.S. state to have a net loss of “advanced industry” jobs — a description encompassing 50 industries including oil and natural gas extraction, aerospace, auto making, new manufacturing, and high-tech services such as computer software and system design.
It is not coincidental that this loss followed passage of HB1010XX and a shift of both drilling and human capital to other states as the economics of the Anadarko Basin and the needs of the U.S. shale industry changed to meet financial demands simultaneously.
The story is told not only in “advanced industry” shrinkage, but also in rig activity, horizontal feet drilled, and barrels produced from 2019 to 2024. It must be noted that Oklahoma rig activity fell farther and faster than in any peer state, shedding capital
investment by as much as 86%, well in advance of corrections in other states.
Oklahoma Rig Activity 2017-2026
Now, here are two pieces of good news:
The next Devon Energy or Expand Energy is very likely being built today by a new generation of industry leaders who may someday be heralded as the next Larry Nichols, Aubrey McClendon, or Harold Hamm. In the coming months we’ll begin introducing these next-generation leaders to you. Embrace them and their efforts to
invest in Oklahoma.
The trend line shows increased interest in Oklahoma’s gassy resources as the nation embraces natural gas for power generation to feed the onshoring of U.S. manufacturing and the growth of artificial intelligence. This means billions of dollars in potential new investment. We better not mess this up.
Rig Activity Trend Since 3Q24
• Ohio, Wyoming, Oklahoma, Pennsylvania
For 2026, Oklahoma’s road to recovery begins with better public policy decisions and the creation of an improved Oklahoma business climate:
Tort Reform Including Improvements to the Production Revenue Standards Act (PRSA) — Legislators must prevent trial lawyers and bad actors from exploiting loopholes that handicap companies wishing to invest billions in Oklahoma and
provide more revenue to farm and ranch mineral owners.
Emphasize Natural Gas as Oklahoma’s Growth Engine Instead of Wind, Solar and Battery Storage — In a highly specialized economy, the state must play to its strengths. The oil and natural gas industry pays a statewide production tax as well as ad valorem, income, and sales taxes. Intermittent production and
storage do not pay a statewide fee to benefit schools, roads, bridges, and other lawmaker priorities.
Stop the Gaming of the Ad Valorem Tax System — Lawmakers must establish clear guardrails and oversight to prevent county assessors and local officials from being conned by third-party consultants into pursuing unreasonable valuations for oil and natural gas equipment subject to ad valorem taxation.
Tax Relief — Oklahoma’s effective tax rate among 16-oil and gas states is higher than the average. Only Alaska, New Mexico, Wyoming (significant federal land states), and North Dakota have higher effective tax rates than Oklahoma’s.
Should 2018’s largest tax increase in Oklahoma history be repealed? Is it really more valuable for Oklahoma to use targeted tax incentives to attract aeronautical engineers from Kansas than retain petroleum engineers in Oklahoma? What individual and corporate tax policies must be put in place for Oklahoma to compete for oil and natural gas companies to headquarter here
and for existing Oklahoma-based companies to remain here?
Education Reform — Lawmakers promised improved educational outcomes in 2018 upon passage of the largest tax increase in Oklahoma history with its more than doubling of the gross production tax. This has not proven true. We got the opposite. What “advanced industry” company wants to be headquartered in a state that ranks 50th in education?
California said it didn’t want to lose Chevron to Texas, but did everything it could to make Chevron unwelcome. Oklahoma doesn’t want to lose Devon and Expand Energy to Texas, but it has — along with Conoco, CITGO, Noble, Phillips 66, and others
through the years.
Tulsa and Oklahoma City have lost the race to become “The Energy Capital of the World,” but we can be better at who we are and learn from our neighbor south of the Red River.
Your actions this session can begin the process of reversing policy-inflicted decline and restoring Oklahoma’s competitive edge as a national leader in oil and natural gas development. Lawmakers have the authority and responsibility to reverse
policies that have made our state less attractive to capital, talent, and long-term investment, and to replace them with reforms that restore certainty, fairness, and competitiveness.
You can send a clear signal that Oklahoma once again welcomes the industry that built this state. Our bedrock industry is already investing, hiring, and growing here.
With the right policies in place — policies that encourage investment and reward innovation — this growth can multiply across every corner of our economy. Let’s get to work.
Sincerely,
Brook A. Simmons
President
The Petroleum Alliance of Oklahoma
cc: Members of the 60th Oklahoma Legislature