OIPA: OPI Short-Sighted In Energy Tax Analysis, Benefits
Roller: Same song, second verse
By: James Roller, Oklahoma Independent Petroleum Association
During the 2014 legislative session, the Oklahoma Policy Institute attacked tax provisions that help keep Oklahoma drilling rigs active, a continued effort from the left-leaning think tank that began in earnest in 2009.
The most recent effort by the group to vilify the oil and natural gas industry continues its criticism of tax provisions that have proven to be successful.
Despite crude oil prices that have fallen by more than 40 percent and depressed natural gas prices, Oklahoma has lost only 14 drilling rigs, or 6.51 percent of drilling activity, since its 2014 high of 215 rigs actively exploring for oil and natural gas. By comparison, equivalent energy-producing states of North Dakota and Texas have seen drilling declines of 17.46 percent and 15.64 percent respectively.
Depressed oil and natural gas prices will take a significant toll on state gross production tax revenues in coming months, there’s no escaping that. However, the economic impact would be amplified without the additional production put on the market through continued drilling.
Eliminated from the Oklahoma Policy Institute’s analysis is how increased oil-field employment benefits state coffers through personal income tax and sales tax collections. The oil and natural gas industry accounts for 25 percent of all taxes paid in Oklahoma when those two tax streams are combined with the gross production tax and corporate income taxes. By providing tax programs that encourage the continued production of older oil and natural gas fields, the discovery of new fields and the use of expensive and time-consuming production enhancement techniques, our legislators can help ensure the lifeblood of our state government continues to flow.