With Devon and Expand both fleeing for Houston over the last couple of weeks, it’s hard to argue that things are going great right now in the Oklahoma oil and gas industry.
Well, that is unless you live in denial and work in the oil and gas industry.
Earlier today, The Oklahoman amplified a public letter from oil industry shill Brook Simmons – president of The Petroleum Alliance of Oklahoma – attempting to minimize Devon and Expand Energy fleeing to Houston while inaccurately spinning their departure as somehow being the fault of Oklahoma’s gross production tax.
Here’s how the letter began:
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…
That’s nice. To also borrow from Mark Twain: Denial ain’t just a river in Egypt!
Seriously, two of Oklahoma’s biggest legacy energy companies pack up for Houston within a week of each other, and this guy’s out here telling us reports of the industry’s decline are “greatly exaggerated?” Does he not know what the word exaggerated even means? This would be like KFOR losing both of their Ogle brothers and the station manager saying, “everything is fine.”
As I mentioned, the letter also tries to spin the departure of Devon and Expand as a call to eliminate Oklahoma’s Gross Production Tax. It’s the small severance tax the state places on all the natural resources the Oil Overlords suck out of the ground, and it’s used to fund things like public schools, roads and bridges, and basic state services that keep Oklahoma from collapsing back into the Mary Fallin era of budget crises.
Even though Devon and Expand didn’t drill in Oklahoma – and therefore didn’t have to pay the tax – Brook tries to make that seem like it is the primary reason the companies left.
Via The Oklahoman:
Simmons also made the claim that the seeds for the headquarters relocations were “planted by the Oklahoma Legislature a decade ago” through the 2018 measure HB 1010XX, which increased the gross production tax (GPT) rate on new oil and gas wells from 2% to 5% for the first 36 months of production. Oklahoma taxes oil and natural gas production through a GPT.
“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,” Simmons said in the letter.
Listen. I know it’s Brook’s job as an energy industry shill to push for eliminating all taxes on the industry, but that’s a stretch.
There are lots of reasons Devon and Expand left Oklahoma – mergers, executive tax dodging, Houston being the actual center of the energy universe – but the gross production taxes they didn’t have to pay weren’t one of them.
Anyway, you can read the full synopsis of the letter over at The Oklahoman. It will be interesting to see if our oil dick-sucking lawmakers actually follow through with the idea to lower the Gross Production Tax, or stand up to the industry’s power and influence and do the right and responsible thing.
I think we know how that will play out.
Stay with The Lost Ogle. We’ll keep you advised.
