Petroleum Alliance of OK President Simmons: It’s time for a statewide tax on wind, solar

September 14, 2023

Petroleum Alliance of Oklahoma President Brook A. Simmons issued the following statement in response to Senate President Pro Tempore Greg Treat’s comments during a press conference Wednesday regarding a potential gross production tax (GPT) increase on oil and natural gas. Treat listed an increase in the GPT as one potential offset to Gov. Kevin Stitt’s call to eliminate the state’s income tax:

Oklahoma boasts that it is an “all of the above” energy state as the nation’s seventh-largest energy producer, with a top-five ranking in crude oil production, natural gas production, and electricity generation from wind plus a new emphasis on growing solar energy production. We are not, however, an “all of the above” state when it comes to energy taxation. Only the oil and natural gas industry pays a statewide gross production tax on the energy it produces.

In FY2023, the gross production tax on oil and natural gas generated $1.8 billion in revenue for the state. In FY2022, it accounted for $1.5 billion in state revenue. When income taxes, corporate taxes, sales taxes, and other miscellaneous taxes and fees are included, the state’s oil and natural gas industry accounts for approximately 25% of state revenue annually.

Meanwhile, we have tax-consuming industries that are paying less than nothing. Since 2013, Oklahoma taxpayers statewide have paid more than $1.25 billion in subsidies for wind power generation with hundreds of millions of dollars more set to be paid out through 2026. Simultaneously, Oklahoma ratepayers statewide are left dealing with wind and solar energy’s lack of reliability when needed most and taking on the cost of wind overpenetration as we subsidize power in other states.

Any discussions on increasing taxes on energy production, even hypothetical, should begin and end with instituting a statewide production tax on wind and solar.

ABOUT THE PETROLEUM ALLIANCE – The Petroleum Alliance of Oklahoma is the only trade association in Oklahoma that represents every segment of the oil and natural gas industry, representing more than 1,400 member companies engaged in the upstream, midstream and downstream sectors of the state’s defining industry.