When you think of Oklahoma, many people think of oil and natural gas. And with good reason – Oklahoma is a product of the oil boom and titans of the industry call our state home.
One in five salary workers are employed, in some way, by the industry. We currently have more than 120 rigs running in Oklahoma and oil and gas are one of the biggest job creators in our state.
With that in mind, shouldn’t we want to allow the industry to modernize their technology? Lawmakers took the first step a few years ago by passing legislation allowing for long lateral drilling in shale formations. The results were overwhelmingly beneficial. This session, Senate Bill 867 aims to further expand those abilities at zero cost to the state. The provision allows for long lateral drilling in non-shale formations. Going back and amending one word to that original bill will undoubtedly produce better results and more capital for an industry on the rebound. Time has shown us that when oil and natural gas is doing well, Oklahoma benefits.
There is a group of individuals who believe the industry doesn’t pay its fair share. They say that if we could only get oil and gas to pay more, our state budget problems would go away. The critical flaw in that theory is that when you tax more of something, you tend to get less of it. Because we can’t currently compete with drilling technology and quality of rock in Texas, we would likely see a lot of Oklahoma jobs and citizens disappear to our neighbors down south. In the last two years, the oil and natural gas industry has paid $166 million more than they owed the state. They effectively raised their own taxes without anyone asking – proving their dedication to the success of Oklahoma.
No one wants to see our state struggling. No one likes the budget shortfall and the other issues facing Oklahoma. Punishing one industry, however, will get us nowhere – especially when that industry pays the most in taxes and employs the most people. Oil and gas companies faced a tough time a few years ago and have worked tirelessly to bounce back. Oklahoma should modernize our drilling technologies and allow the industry to rebound instead of taxing them into Texas.
Column by Fred Morgan, President and CEO of the State Chamber of Oklahoma, printed in The Journal Record on May 12, 2017