Claremore Daily Progress

State/Nation

May 23, 2014

New wells to keep pumping with low taxes

OKLAHOMA CITY —

The Legislature set a new production tax rate for horizontal oil and natural gas wells on Thursday, in a move opponents called a victory for big energy companies.

Proponents of the new tax said failing to act — or raising the tax too much — would drive the booming industry and corporations based here to other oil-rich states, like North Dakota or Texas.

“If we mess this up, it will have incredible ramifications, I believe, in the future,” said Rep. Josh Cockroft, R-Wanette. He added that the tax will “define the future of our state.”

The plan now heads to Gov. Mary Fallin for her signature.

In 1994, lawmakers adopted a tax break that charged oil businesses a 1 percent production tax on horizontal wells during the first four years of use.

Horizontal drilling was a risky technology at the time. Today it accounts for about 70 percent of the state’s wells.

And the four-year window is important, since half of the productivity of a typical well happens within that period.

The tax break was set to expire in mid-2015, returning the production tax to its normal 7 percent rate. Instead, lawmakers agreed to a 2 percent rate for the first three years of a well’s production, followed by the standard 7 percent.

Opponents said the state should have waited another year before setting a new rate. They argued a 1 percent increase wasn’t enough, and that the Legislature should have asked experts to recommend competitive tax rates for an industry that provides about a third of the state’s annual revenue.

“This bill continues a huge, unnecessary subsidy for drilling that would have happened without the subsidy,” said David Blatt, executive director of the Oklahoma Policy Institute, a liberal-leaning think tank in Tulsa, in a prepared statement.

“It sides with a few well-connected oil executives and their lobbyists whose views do not represent the majority of Oklahomans or even many members of the industry. Instead of investing in Oklahoma while the energy boom lasts, this bad deal gives away our prosperity,” he said.

Text Only
State/Nation
  • Perry: Texas plans to send 1,000 guardsmen to border

    Texas Gov. Rick Perry plans to deploy as many as 1,000 National Guard troops to South Texas to bolster security along the Mexico border, a local lawmaker confirmed Monday.

    July 21, 2014

  • NASA renames building for Neil Armstrong

    NASA has honored one of its most famous astronauts by renaming a key building at the Kennedy Space Center in Florida.

    July 21, 2014

  • New arrivals worry some in the Oklahoma panhandle

    A family who says they were excommunicated from Warren Jeffs' polygamous sect has moved to a small city located in the Oklahoma Panhandle, raising concerns among some residents.

    July 20, 2014

  • Celebrate 45 years since man's first steps on the moon

    Now's the time to get moonstruck.

    Forty-five years ago Sunday, Apollo 11's Neil Armstrong and Buzz Aldrin became the first humans to set foot on another world. Armstrong's "one small step ... one giant leap" on the dusty lunar surface July 20, 1969, still stirs hearts.

    July 20, 2014

  • US outlines case against Russia on downed plane

    Video of a rocket launcher, one surface-to-air missile missing, leaving the likely launch site. Imagery showing the firing. Calls claiming credit for the strike. Recordings said to reveal a cover-up at the crash site.

    July 20, 2014

  • Oklahoma Capitol renovation project previewed

    State officials have previewed preliminary plans for renovating the century-old Oklahoma State Capitol amid a display of artifacts from groundbreaking ceremonies for the structure.

    July 17, 2014

  • House passes tax breaks to boost charitable giving

    The House passed a package of tax breaks Thursday designed to boost charitable donations by seniors, private foundations and procrastinators.

    One provision provides tax breaks to people over 70 who make donations from their individual retirement accounts. Another reduces excise taxes on private charitable foundations.

    July 17, 2014

  • Should online accounts die when you die?

    Should your emails, web albums and other online accounts die when you do? Or should you be able to pass them down to a family member much as you would a house or a box of letters?

    July 17, 2014

  • Obama, Putin discuss Malaysia Plane incident

    The Kremlin says Russian President Vladimir Putin and President Barack Obama have discussed the Malaysia Airlines plane incident over eastern Ukraine.

    July 17, 2014

  • Microsoft cutting 18,000 jobs

    Microsoft announced the biggest layoffs in its history Thursday, saying it will cut 18,000 jobs or 14 percent of its workforce as it streamlines its Nokia mobile device business to focus on using the Windows Phone operating system.

    July 17, 2014