By Brook A. Simmons

The Oklahoma Legislature convenes this week at Governor Kevin Stitt’s call for a special session on tax fairness, a personal state income tax reduction, and budget-making transparency.

Much is at stake and not just around the tens of millions of dollars at stake in the legal conflict over taxation in Indian country.

The Biden administration’s whole-of-government attack on the U.S. oil and natural gas industry has set Oklahoma up for increased budget volatility, workforce destruction, and future revenue failures. Lawmakers should use this opportunity to enact a statewide tax or fee on wind and solar power generation before it is too late.

Our state’s oil and natural gas economy took off in 1897, when the Nellie Johnstone No. 1 sent a gusher of crude into the Bartlesville sky and launched a historic drilling boom that made Tulsa the “Oil Capital of the World.”

Since that beginning, the economy of the territory and soon-to-be state has been inextricably tied to the commodity cycle, oil and gas industry innovation, global demand, and public policy.

Today, natural gas is key to industry activity in Oklahoma and ALL non-federal revenue streams flowing into state coffers. The state is our nation’s fifth-largest natural gas producer. We are natural gas rich. We are oversupplied.

Our role as a natural gas leader buoys the General Revenue Fund FIRST, with 80% of new gas gross production tax and almost 86% GPT (after year 3) flowing there for appropriation until a 5-year moving average is hit. Excess then flows to the Revenue Stabilization Fund and proportionately into county highway and public education funds. This is unlike taxes on crude oil with seven separate off-the-top earmarks before the general fund sees a penny.

So, one of the greatest financial and economic development tools lawmakers have to put extra dollars in classrooms, toward healthcare, or for other core government services is an Oklahoma resource being suppressed by the Biden administration and long-gone state legislators for power generation in favor of the tax-consuming wind industry.

Electricity generation is the biggest driver for natural gas demand. The state has far exceeded its 15% target of power generation from wind and has paid out more than $1.25 billion in wind subsidies 2013-2022. Hundreds of millions of dollars more in state subsidies are available for wind through 2026. Now, some state leaders are eager for solar power generation. In 2022, Congress granted wind and solar “forever” federal tax subsidies. Oklahoma will pay the price.

If the special session call is for tax fairness and a reduction of the personal income tax, a statewide tax or fee on wind and solar power generation is key – the same kind of statewide tax paid by the oil and natural gas industry since 1908. To do less is to set Oklahoma up for failure in the next oil and gas industry downturn.

— Brook A. Simmons is president of The Petroleum Alliance of Oklahoma