Energy Briefing 2022 Recap
On January 26, 2022, OEPA hosted their annual Energy Briefing for Legislators at the Oklahoma Capitol. This provided us a chance to present the latest issues to senators and representatives before the legislative session. Over 75 legislators and members joined us. It was a great time to interact before the session began. During this time, legislators were informed on the McGirt Decision by Solicitor General Mithun Manginshani, updated on the national and state rig count and briefed on the upcoming OEPA Legislative Agenda.
Solicitor General Mithun Mansinghani gave a quick history on the McGirt decision (read more here) and spoke on the effects it has had on the oil and gas industry. Immediately after the Supreme Court ruled for the McGirt Decision, a law enacted in 2005 known as “SAFETEA” was put into motion. Under this law, Oklahoma can be granted the authority for environmental regulation. At the time, the EPA agreed to grant Oklahoma this authority. Oklahoma Tribes did not agree with this, and the Pawnee tribe sued the EPA. In December, the EPA under the Biden Administration reconsidered this decision and removed the authority from Oklahoma and gave 45 days to submit comments (learn more here).
OEPA President David Little then gave a quick update on the state’s oil and gas industry. As of January 21, the national rig count is 604 drilling, up from only 226 last year. In Oklahoma, 50 are drilling, up from 17 rigs running last year. Little said the industry is doing better. He then introduced Senator Taylor, Vice Chair of Energy, and Representative Moore, Vice Chair of Energy and Natural Resources. They gave an overview of upcoming bills they have been working on that will come up in the session, including bills stemming from an investigation brought on by last year’s energy crisis, several bills regarding hydrogen energy, a bill regarding Production Revenue Standards Act (PRSA) and a bill dealing with the Corporation Commission regarding field inspector pay.
David Guest, OEPA Legislative Committee Chairman, reviewed the upcoming OEPA Legislative Agenda. There are two main focuses this year – PRSA (production revenue standards act) and the restoration of historical economic incentives. Regarding the PRSA, which was enacted in 1992, OEPA has been working with other industry organizations to develop language changes to update and modernize this statute. They have worked hard to develop the best updated statute that is fair to all owners. OEPA will work with both chambers to make sure all owners are fairly represented.
The restoration of historical economic incentives will simply bring back tax incentives, not create new ones. These tax incentives allow operators to extend the life of production from older oil and gas wells thereby extending the tax revenue from gross production taxes paid to the state of Oklahoma.
We would like to extend a special thank you to all the OEPA members and Oklahoma Legislators that took time to hear from OEPA and other energy organizations.
Watch the full Energy Briefing here.