Oklahoma is an energy state. We are the No. 3 producer of natural gas in the nation and the No. 5 producer of crude oil.
Oklahoma is also ranked fourth in the nation for installed wind capacity, but the difference between how our government treats the energy sources is clear.
In Oklahoma, every oil and natural gas producer pays gross production taxes on every barrel of oil and every mcf of natural gas drawn from deep under the Sooner State. Those taxes are the main reason the oil and natural gas industry accounts for 25 percent of all taxes paid in the state. With one-quarter of our state government’s budget to fund education, build roads and keep our state safe coming from the exploration and production of Oklahoma oil and natural gas, a vibrant and healthy oil and natural gas industry benefits all Oklahomans.
For wind energy, it is a far different story. There is no production tax on electricity generated from the turbines that have sprung up across Oklahoma like weeds in the spring, and the vast majority of the power produced is sent out of state to power the Dallas metroplex, Tennessee and other states in the mid-South. Thanks to a suite of overgenerous tax subsidies to fund wind farm construction, our state pays out more than $200 million per year to wind company owners. Without a production tax on the energy created, the tax dollars those companies take to send their power out of state comes from the tax dollars of average Oklahomans.
And here’s the rub. Increased wind energy development subsidized by Oklahoma taxpayers erodes the value of Oklahoma natural gas, one of the state’s largest tax generators. Oklahoma natural gas is a key component of electricity generation in Oklahoma, and it works even on days when the wind doesn’t blow. Unfortunately, by supporting wind energy, an undependable and unpredictable energy source that is uneconomic without government subsidies, state lawmakers reduce demand for natural gas used in electricity generation and the tax dollars associated with it.
As a member of the Windfall Coalition, the Oklahoma Independent Petroleum Association is opposed to a tax structure that devalues one of our state’s most valuable resources. For our state to continue to prosper, we must level the playing field for all energy sources.
Tim Wigley is executive vice president of governmental affairs for the Oklahoma Independent Petroleum Association.