Small Oil Producers Rally For Higher Taxes

Small gas and oil producers went to the capitol Wednesday to ask lawmakers to raise their taxes.

The small producers say they want all producers, large and small, to pay the same 7-percent tax instead of the 2-percent they pay now.

The group also wants lawmakers to turn down big oil producers’ request to expand horizontal drilling. They say horizontal drilling expansion would dip into small producers’ profits.

“I represent a lot of small producers.  We’re getting absolutely murdered by these horizontal wells,” said Oil & Gas attorney, Lee Levenson. “What I want to do is build in a protection for small operators. We’ve been here a long time. We’ll be here long after they’re gone.”

The producers also say raising the tax rate for everyone, big or small, to 7-percent will help the state bridge its $900-million budget gap and create a level playing field.

“Where are they going to go? Where are they going to drill where they get a better rate than 7-percent? Texas is seven and a half effective rate. North Dakota is 10. Where are they going to go to get a better rate than 7?” asked small oil producer Mike Cantrell.

“The oil and gas industry pays 25-percent of all the taxes in the state already. A quarter of every tax dollar comes from us. So, while we appreciate the challenge they have in filling that $900-million hole, I don’t think the thing to do is go to your state’s most important industry and tax it where you might run off investment,” said Tim Wigley with the Oklahoma Independent Petroleum Association.

Some lawmakers have told News 9 they would consider backing expanded horizontal drilling in exchange for raising the tax on production.