Oil Producers Group Proposes Raising Gross Production Taxes

Tuesday, April 4th 2017, 6:35 pm
By: Dana Hertneky

A battle is bubbling up between the state's small oil producers and bigger companies.

The small producers want the state to raise taxes that oil producers pay. Currently, oil companies have to pay 2 percent gross production tax for the first 36 months then it goes up to 7 percent.  

This newly formed group of small producers called Oklahoma Energy Producers Alliance (OEPA) wants to raise that rate to 7 percent for across the board. 

Columbus Oil Company in Seminole has been in business since 1971.

“It’s a tough business,” said Darleen Wallace. She’s been running the business since 2004 when her husband died. “One guy told me don’t get your panties in a wad because you aren’t getting your way. And I thought, 'buddy, boy, you just wait. You may be 6 foot 6, telling me I can't do it. Well, you just watch me.'”

She's clearly not one to back down from a fight, and now, she and a group of smaller oil producers are bracing for one. Wallace already pays 7 percent gross production tax because her wells have been there for years.

“We’ve been paying my fair share and I think the big boys need to step up and do the same thing. Pay their fair share,” she said.

The group is also asking lawmakers to strike down proposals that would allow companies to use horizontal drilling to tap into oil in areas where those like Wallace are already drilling.

“I want a future for my family. I want a future for this state. If we allow them to come in and rape our natural resources and take it all at 2 percent then what are we going to have in the future this state, where is our income going to come from?” she said.

“An example that comes to mind is I have a right to fish in a pond and so do you, so if I’m catching fish in the same pond that you have the lease, that doesn’t mean I’m stealing fish from you. We both have the right to go catch those fish,” countered Chad Warmington, the OKOGA president who represents many of those larger oil companies. 

He argued the lower gross production taxes offers incentives for drilling which is where most of the jobs are.

“The economic bang for the buck comes in the drilling of those wells and the rigs that are running and all the activity,” he said.

Members of OEPA will be rallying Wednesday at the state Capitol and meeting with lawmakers.