Speech highlights oil industry

Gov. Kevin Stitt last week highlighted his views of the economy and vision for the state over the next year.

The oil and natural gas industry was included in both.

In his State of the State address, Stitt mentioned oil and natural gas in the context of taxes.

Lawmakers last year raised the gross production tax rate, and Stitt last week called for some of the increased revenue to be set aside in the state's rainy day fund.

“We must be honest with ourselves and recognize that last year's tax increases made us more dependent on the price of oil,” Stitt said during the speech. “We must be good fiscal stewards of this decision by creating more stability through savings.”

Oil and natural gas industry leaders praised both the savings effort and a sense that fewer bills so far this session are focused on the state's oil patch.

“The oil and gas industry is the driving source for the economy of the state. His (Stitt's) point is we need to be prudent about how we save and prepare for the dips of being an oil and gas-dependent state,” said Chad Warmington, president of the Oklahoma Independent Petroleum Association — Oklahoma Oil and Gas Association.

“We need the state government to be operating efficiently and effectively so when we get into a downturn, they've saved and been prudent with the dollars they've collected when times are good.”

While lawmakers are considering some bills involving the industry — including a proposal that would affect whether counties and local governments can regulate some aspects of the industry — the general sense so far is that it could be a quieter legislative session for the industry.

“More than anything, we're trying to have a lowkey session,” Warmington said. “Our top two agenda items are peace and quiet. We're excited to continue to do our part. We want the legislature to leave us alone, and we'll keep cranking away.”

While Stitt and some lawmakers are looking to steady the state economy through a bigger savings account, others say state leaders should prepare for volatile oil prices by diversifying the state's energy sector.

“If they want to focus on business, they need to allow for energy to develop naturally without barriers and legislative moves to try to limit certain forms of energy in favor of others,” said Johnson GrimmBridgwater, director of the Oklahoma Sierra Club. “We want to see the free market work in the energy sector.”

Backed in part by a favorable tax system, Oklahoma's wind energy sector grew from nothing to the country's second-largest wind energy producer within a decade. Over the past three years, lawmakers have ended those tax benefits. Some proposed legislation this year would go further, applying a tax on wind energy production.

Environmental groups are opposed to both that effort and other current and proposed restrictions on solar energy production in the state.

“If we want to be a Top 10 state, we need to stop putting renewable energy in a box while protecting other systems of energy and let the market work,” Grimm-Bridgwater said.